Wyden Asking Auto Companies If They've Uncovered Xinjiang Links in Supply Chains

Senate Finance Committee Chairman Sen. Ron Wyden, D-Ore., said he sent letters to major automakers asking about their supply chains' links to the Xinjiang region in China because "there are substantial questions with respect to forced labor ... and we want to get to the bottom of it."

Wyden, who was interviewed at the Capitol the same day he publicized his letter to eight automakers, said he didn't want to speculate on whether a Withhold Release Order on some auto inputs would cause the same level of disruption to auto manufacturers as the recent shortage in computer chips did. "First you find the facts. Once you find the facts, then you can talk about remedies," he said Dec. 22.

However, he said being sensitive to human rights issues is not incompatible with "companies doing well."

Wyden's letter was spurred by a report out of England that alleged that electronics parts produced in China are made in part by Uyghur workers transferred to Eastern China against their will and that steel, aluminum, lead, lithium and copper are processed in Xinjiang and make their way into car frames, axles, bodies, engine casings, wheels and brakes made in Europe or into batteries made in Asia (see 2212060054).

Wyden asked whether each automaker conducts "its own supply chain mapping and analysis of raw materials, mining, processing, and parts manufacturing to determine if its supply chain is linked to Xinjiang? If so, please describe the extent of supply chain mapping and analysis, and specifically indicate if these efforts include sub-suppliers."

He asked if the companies have found a link to Xinjiang in their supply chains -- if they had, those goods would be barred from U.S. entry under the Uyghur Forced Labor Prevention Act -- and if so, does the company have a plan to exit Xinjiang. He asked for details of that plan, if it exists.

He asked if the company had "ever terminated or curtailed, or threatened to terminate or curtail, a commercial relationship with a supplier or sub-supplier, including mines, mineral processors, and any affiliated entities, because of its use of raw materials, mining, processing, or parts manufacturing linked to Xinjiang? If so, please describe, for every such incident, the actual or threatened termination or curtailment and the ultimate outcome, and whether the outcome was reported publicly."

He also asked if the same action was taken if a supplier declined to comply with supply chain mapping or auditing.

He asked the companies if any of their shipments to the U.S. had ever been detained or excluded under the ban on goods made with forced labor or due to UFLPA.

"If so, for each such instance, please: a. describe the circumstances surrounding the CBP enforcement action; b. describe any information provided by CBP regarding the enforcement action, including information about the suspected forced labor; and c. describe [your company's] response to the CBP enforcement action."

Wyden asked the automakers to respond by Jan. 13.

A number of automakers already had responded publicly to the U.K. report, and they repeated those comments when asked for a response to Wyden's letter.

Volkswagen said: "We stand for individual freedom, fair working conditions, open world trade, economic development and peaceful coexistence, and we condemn any form of discrimination. Therefore we reject forced labor and all forms of modern slavery including human trafficking."

"Business partners must reject all conscious use of forced and compulsory labor as well as all forms of modern slavery and human trafficking," VW said, and said it asks its direct suppliers to tell their suppliers they have to comply with VW's sustainability requirements.

"However, if the Volkswagen Group learns of allegations, it investigates them immediately by using our 'Supply Chain Grievance Mechanism.' Serious violations such as forced labor could result in termination of the contract with the supplier if mitigation measures fail," the company said. VW said any stakeholder, including social organizations and workers, can submit a grievance online or by email.

The company also said it received the letter, and is working on a response.

Honda said it expects its suppliers to follow its global sustainability guidelines, which cover labor. "As with other inquiries from Capitol Hill, Honda will work with policymakers on these important issues,” the company said.

General Motors said its code of conduct prohibits forced labor, discrimination and interference with the right to engage in collective bargaining, and it applies to its suppliers.

“We actively monitor our global supply chain and conduct extensive due diligence, particularly where we identify or are made aware of potential violations of the law, our agreements, or our policies -- such as our Supplier Code of Conduct, which is guided by the United Nations Global Compact," GM said. "We use this process on a case-by-case basis to investigate issues, substantiate claims, establish the facts and act rapidly to determine the appropriate solution on a case-by-case basis, up to and including the termination of business relationships."

Stellantis said "we take these matters extremely seriously. We have Global Responsible Purchasing Guidelines which are strictly adhered to when awarding direct suppliers' contracts with our company. Building strong responsible supply chains is an important focus for us." The company said it is reviewing the claims from the study and Wyden's letter.

Ford, Toyota, and Mercedes-Benz did not respond to questions about the letter by press time. Tesla does not maintain a press office.