Since automakers can’t seem to fully extradite themselves from Xinjiang, it’s time to step up enforcement of our trade laws.
Automakers like BMW and Jaguar Land Rover sourced auto parts from a banned Chinese supplier with ties to forced labor and imported vehicles made with those parts to the United States, violating the Uyghur Forced Labor Prevention Act (UFLPA), the Senate Finance Committee unveiled in a new report released on Monday.
The two-year investigation undertaken by Democratic committee staffers alleges BMW, Jaguar Land Rover, and Volkswagen were told by their supplier that they had sourced auto parts made in the Xinjiang region of China by a company currently on the UFLPA Entity List. While Volkswagen worked to correct the issue, BMW and Jaguar Land Rover moved ahead with importing the vehicles to the United States, the report claims.
Senate Finance Committee Chairman Ron Wyden called for stronger enforcement of the UFLPA in response.
“Automakers are sticking their heads in the sand and then swearing they can’t find any forced labor in their supply chains,” Wyden said in a statement. “Somehow, the Finance Committee’s oversight staff uncovered what multi-billion-dollar companies apparently could not: that BMW imported cars, Jaguar Land Rover imported parts, and VW AG manufactured cars that all included components made by a supplier banned for using Uyghur forced labor. Automakers’ self-policing is clearly not doing the job.”
The UFLPA is a two-year-old law that bans all goods made whole or in part in the Xinjiang region of China due to the Chinese Communist Party’s pervasive use of forced labor in the region. More than 1 million people are said to be detained in the region, part of the CCP’s genocide of the Uyghur people, and many are forced to work in factories against their will.
Congress passed the UFLPA nearly unanimously, with the intention of encouraging corporations to exit the region and move supply chains elsewhere. U.S. Customs and Border Protection is now charged with enforcing the law and has made progress in curbing imports of goods made with forced labor. But supply chains in Xinjiang run deep, particularly in the auto industry, and many companies have yet to break those ties.
Which brings us back to BMW and Jaguar Land Rover.
The Senate investigators did a bit of detective work to trace the parts back to Xinjiang. It starts with a California-based auto supplier called Bourns, Inc., who sourced auto components called LAN transformers from a Chinese firm named Sichuan Jingweida Technology Group (JWD). Products by JWD are banned from the United States because its “goods are presumed to be made with forced labor,” according to the committee. Bourns essentially served as a middle man, providing the JWD-made parts to Lear Corp., which is a direct supplier to BMW, Jaguar Land Rover, and Volkswagen.
On Jan. 3 2024, Bourns told Lear the LAN transformers “had been produced by JWD, and thus were prohibited in vehicles shipped to the United States.” Eight days later, Lear sent letters to BMW, Jaguar Land Rover and Volkswagen “informing them of the banned components.”
Now, this is where the rubber really meets the road.
Volkswagen almost immediately “disclosed that a shipment of its vehicles intended for the U.S. market included parts made with a supplier banned by the U.S. government under UFLPA.” BMW and Jaguar Land Rover apparently did not.
Enter Senate investigators, who wrote to the automakers in April 2024 asking them specifically “whether they ‘directly or indirectly sourced parts from JWD.'” Jaguar Land Rover “claimed to be unaware of its links to the manufacturer listed on the UFLPA Entity List, and BMW informed the committee that JWD was not on their ‘supplier list.'”
But committee investigators didn’t stop asking questions, and BMW eventually “disclosed that at least 8,000 Mini Cooper cars containing JWD components had been shipped to the United States.” Not only had BMW failed to notify investigators about its ties to JWD, but the automaker continued to import vehicles made with the parts in question until at least April 2024, according to the report.
For its part, Jaguar Land Rover also continued to import vehicles made with the banned parts through April 2024. But the company blamed a mix-up for the error, telling the committee that Lear sent the letter to Jaguar’s parent company, Jaguar Land Rover Limited, instead of Jaguar Land Rover North America, the subsidiary charged with importing vehicles to the U.S. market.
In a statement to The New York Times, BMW said that it has halted imports of the banned parts and would replace them in the vehicles that contained them. Jaguar Land Rover told the NYT that “the parts were used in older vehicles no longer for sale and were imported only as replacements. The company, which is based in Britain, said that when it learned that the parts were on the forced labor list, it immediately stopped shipping them and earmarked them for destruction.”
This whole saga really highlights the entrenchment of forced labor in the auto supply chain, and the need for automakers to get their supply chains fully out of China as quickly as possible. Multiple reports have found that automakers have been too slow to extradite themselves from supply chains in Xinjiang, including this February 2024 report from Human Rights Watch.
The Senate Finance Committee, its worth noting, said in the report that it was driven to launch its own investigation after findings revealed in 2022 by Sheffield Hallam University’s Helena Kennedy Centre for International Justice concluded that forced labor was so prevalent in auto manufacturing that if “you have bought a car in the last five years, some of its parts were likely made by Uyghurs and others forced to work in China.”
And while Volkswagen comes out in this particular case looking like the better player, it’s worth noting that the company maintains a joint venture in Xinjiang. Members of Congress previously have urged the German automaker to exit that operation.
Read the Senate Finance’s Committee’s full report, Insufficient Diligence: Car Makers Complicit with CCP Forced Labor.