Major car companies like Ford, Tesla, and Toyota are at 'high risk' of sourcing parts made by Chinese forced labor, a report finds: 'It's an industry-wide problem'

Jacob Zinkula
Sat, December 10, 2022

Tunahan Turhan/SOPA Images/LightRocket via Getty Images

A new report found "massive and expanding" links between major car companies and China's Xinjiang region.

The Chinese government has been accused of committing human rights abuses in the region.

Similar accusations have been made in the past against Apple, Amazon, and Nike.

If you bought a car recently, some of its parts may have been made through forced labor in China.

That was the key finding of a six-month investigation undertaken by researchers from Britain's Sheffield Hallam University. In a new report, the researchers say their analysis of publicly available documents revealed "massive and expanding links" between major car companies and China's Xinjiang region, where evidence has emerged of human-rights abuses committed by the Chinese government against Uyghur Muslims, including forced labor, government surveillance, forced sterilization, and re-education camps. Some have called it a "genocide."

The 78-page report says "every major car brand" — including the likes of Ford, GM, Tesla, and Toyota — is at "high risk" of sourcing parts from companies linked to these human rights abuses.

"There was no part of the car we researched that was untainted by Uyghur forced labor," the team's lead researcher Laura Murphy told The New York Times. "It's an industry-wide problem."

A year ago, the Uyghur Forced Labor Prevention Act was signed into law, which banned US imports of products made wholly or partly in the Xinjiang region, unless the company could prove they were not using forced labor. Since going into effect in June, customs officials say they've stopped 2,200 shipments — valued at over $728 million — from entering the US.

Car companies contacted by The Times "did not contradict the report," but said they were committed to ensuring their supply chains were free of human rights abuses. Insider reached out to Ford, GM, Tesla, and Toyota for comment.

In a statement, GM said, "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," adding that its supplier code of conduct clearly prohibits any forced labor or abusive treatment of workers.

"It is not impossible to audit one's supply chain to identify risks"

The auto industry's supply chains are "closer to a ball of spaghetti than a linear chain," Simon Croom, professor of supply chain management at the University of San Diego, told Insider. The average automaker may have links to as many as 18,000 suppliers, including their direct suppliers, the suppliers of those suppliers, and so on.

The Sheffield Hallam report lists roughly 200 companies in China and across the globe with potential links to Xinjiang, where steel, copper, aluminum, batteries, and other components are produced.

Croom, who previously worked for Jaguar and wrote his PhD dissertation on auto supply chains, says he believes many supply chains — both in the car industry and elsewhere — have connections to forced labor in the region.

"I have been in no doubt that many supply chains incur forced and slave/sweat labor in their upstream tiers," he said, "and it is very clear the auto industry is one such example."

Per Croom, while many companies claim to lack full insight into their supply chains, "it is not impossible to audit one's supply chain to identify risks."

"There is no reason why auto manufacturers or other OEM companies cannot verify their supply lines," he said, "and I firmly believe the lack of transparency is a thing of the past and thus OEMs are willfully ignoring such abusive suppliers."

Susan Golicic, however, a supply chain professor at Colorado State University who previously worked at Chrysler, says that while she can't speak to the report's claims specifically, it can be challenging for companies to keep a full grasp on their extensive supply chains.

"When suppliers are beyond the third tier, it is often tough for the OEMs to keep track of what they are doing, as well as even who and where they are," she told Insider. "Some suppliers can be very small and may lack technology to easily communicate or provide transparency into the front end of the supply chain."

In response to supply chain challenges during the pandemic, many companies have taken steps to "onshore," "friendshore," or "nearshore" — parts of their supply chains, moving them back to the US, to countries that are political allies, or to countries that are closer geographically.

But while these shifts could provide companies greater transparency into their supply chains, many are likely to retain global exposure in the decades to come.