Volkswagen Probes Supplier After Chinese Auto-Parts Firm Accused of Pushing Out Graduates

Volkswagen has launched an investigation into complaints that one of its Chinese suppliers pressured more than 100 newly hired college graduates to resign, after the case triggered public criticism and scrutiny from local labor authorities.

A Volkswagen China spokesperson told The Paper today that the German automaker attached “great importance” to complaints involving the supplier and had started a special investigation immediately. The investigation is still under way, the spokesperson said.

“Respecting workers’ legitimate rights and interests is a core principle followed by Volkswagen Group in all business operations,” Volkswagen China said, adding that the same principle applies to supply-chain management and that basic values and rights must be fully protected.

The supplier at the center of the controversy is Changzhou Xingyu Automotive Lighting Systems Co, a major Chinese vehicle lighting manufacturer. The company, known as Xingyu, supplies carmakers including Volkswagen, Mercedes-Benz, Huawei-backed Harmony Intelligent Mobility Alliance, Chery and Geely, according to its website.

The dispute began after online posts alleged that Xingyu had pushed out a large number of 2026 college graduates shortly after hiring them. Recordings said to be of conversations between company human resources staff and employees showed that in early August, the company began group meetings with new graduates and offered them what critics described as a forced choice.

According to the online allegations, graduates who agreed to resign for “personal reasons” would receive half a month’s salary as compensation. Those who refused would be reassigned to front-line factory jobs, including assembly-line work, light installation and screw fastening, with pay recalculated under the company’s general-worker system. Some employees also alleged that HR staff used background-check pressure during the talks.

On August 25, the Changzhou human resources and social security bureau said Xingyu had hired 440 graduates from the class of 2026 and terminated labor contracts with 107 of them. The bureau said the company’s communication during the negotiations had been crude and insufficient, creating a negative social impact. Xingyu apologized and suspended its human resources director, the bureau said.

The bureau said local authorities had provided one-on-one job placement support to the affected graduates. As of August 25, 22 of the 107 had found jobs, while 14 had attended interviews with other companies.

On August 27, Xingyu apologized for terminating contracts with the 107 graduates. It said it would provide job-search and living subsidies, help contact other employers and offer six months’ salary as compensation to those who remained unemployed after three months.