Volkswagen China, Mercedes Review Supplier Labor Compliance After Xingyu Layoff Controversy

Volkswagen Group China said it has launched a special investigation into complaints about supplier labor practices, while Mercedes said it has accepted a report concerning Xingyu Co.'s labor compliance, according to Jiemian News. The comments came after public attention over Changzhou Xingyu Vehicle Lighting Co.'s handling of recent graduate hires. Jiemian News reported that Xingyu recruited 440 fresh graduates in its 2025 autumn campus hiring round, but 107 of them later reached settlement agreements to end their labor contracts after being called in for talks in August. Changzhou's human resources and social security bureau said on August 25 that the company handled the negotiations in a simple and rigid way and caused a negative social impact. Xingyu apologized on August 27 and said it would provide three months of living subsidies to the affected graduates, continue free dormitory housing for those staying on campus, help match jobs through industry contacts and job fairs, and pay an additional six months of salary if some graduates still had not found new jobs by the end of November. The company said its human resources director has been suspended. It also said there was no violation in applying for employment or talent subsidies. Xingyu, listed on the Shanghai Stock Exchange, reported revenue of 6.884 billion yuan for the first half of 2026, up 1.87% year on year, while net profit attributable to shareholders fell 5.26% to 669 million yuan.