The head of the Volkswagen Group, Oliver Blume, wants to clear one major construction site after the next. In Germany, VW is fighting with IG Metall over layoffs and plant closures in order to get the location’s excessive costs under control. Warning strikes are likely to start at the beginning of next week. The company is forging an alliance with the American start-up Rivian for crisis-plagued software development, and now VW also wants to end the painful Xinjiang chapter. This is a long overdue step. Under former CEO Martin Winterkorn, the Wolfsburg-based company allowed itself to be carried away by investing in the region in western China, far away from metropolises on the coast, in the rush for growth. They did not see the risks that emerged shortly afterwards. After attacks by Uyghur extremists, China launched a purge that parliaments in countries such as Great Britain, the Netherlands and America classify as genocide. Hundreds of thousands of members of the Uyghur minority were put in re-education camps or forced into forced labor. Now VW and its Chinese partner SAIC are handing over the plant in Urumqi to another local investor, as well as a test track in the region. This is hardly economically significant, and for the handful of Uyghurs who work there, the situation could even worsen under the new owner. Nevertheless, by being present on site, the Wolfsburg residents have made a fig leaf of themselves and provided the Communist Party with arguments that the grievances in Xinjiang are just propaganda from the West. BASF withdrew from the area, VW had to follow.More on the topicThe move also shows that critical decisions are possible in China without drastic countermeasures immediately following. After the failed audit last year, VW acted prudently and combined the withdrawal from Xinjiang with an extension of the SAIC alliance and new growth plans. However, it is questionable whether they will ignite. Next year, profits from the People’s Republic will continue to fall, and only then, it is hoped, will things start to improve again. For the talks in Germany, this means that the checks from China will no longer cover up problems here in the foreseeable future. The costs must go down.
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