China and the USA are extremely important markets for VW and BMW. In times of growing geopolitical tensions between the two major powers, German car manufacturers are finding themselves in a quandary.
BMW and Volkswagen are in political trouble in the USA because of components manufactured by a Chinese subcontractor. The chairman of the Finance Committee in the Washington Senate accuses the two German car manufacturers and Jaguar Land Rover of using electronic components from a Chinese company whose products are not allowed to be imported into the United States due to suspicion of forced labor.
Democratic Senator Ron Wyden called on US Customs and Border Protection to take tougher action against companies that “fuel the shameful use of forced labor in China.” Both Volkswagen and BMW emphasized on Tuesday that they wanted to comply with the law.
Specifically, the case concerns electronic components from the Chinese company Sichuan Jingweida Technology, which were sent to the car manufacturers as part of a longer supply chain. Jingweida falls under a law in the USA that has banned the import of products made using Uighur forced labor since 2021. Human rights organizations accuse the Beijing leadership of mass internment of members of the people living in the west of what is now the People’s Republic.
The initial purchaser of the Chinese components was a Californian supplier, which in turn sells its products to the Lear Corporation, a direct supplier to the automakers, according to Wyden’s report. Lear informed BMW, Jaguar Land Rover, VW and Volvo about the problem in January. While VW approached the US authorities, BMW is said to have continued to use the disputed components even after being informed by Lear, so that 8,000 Minis with the disputed Jingweida components were subsequently imported into the USA.
“Regarding the supply chain issue, we acted as quickly and responsibly as possible to replace the component and comply with the Uyghur Forced Labor Prevention Act,” a spokesman for VW in the US said. In February, US customs apparently held up the importation of several thousand Wolfsburg-based vehicles into the US in connection with the case until VW had replaced the parts.
BMW left unanswered whether the Chinese components were actually installed in 8,000 Minis and delivered to the USA after Lear’s warning. “The BMW Group has taken measures to stop the import of the affected parts and vehicles into the USA,” a spokesman said. “In addition, a service campaign with customer and dealer notification will be conducted for affected vehicles in the United States.”
High social standards and strict guidelines regarding employment practices, human rights and working conditions are an integral part of the BMW Group purchasing conditions. These apply worldwide to all of the company’s direct suppliers and also include a ban on forced labor.