Chinese auto supplier compensates 107 graduates fired barely a month into jobs, punishes managers

JIANGSU: A leading Chinese automotive lighting manufacturer has apologised and punished four managers after firing 107 fresh graduates just over a month into their jobs, in a case that has struck a nerve in China amid a difficult job market for youths.Jiangsu-based Changzhou Xingyu Automotive Lighting Systems hired 372 fresh university graduates this year, but decided in July to reassign or cut some of them after assessing its business prospects.Its human resources department began talks with 140 of the new hires in early August. Thirty-three kept their original positions, while the other 107 had their contracts terminated.Of those dismissed, 75 held bachelor’s degrees and 32 had master’s degrees. Sixty worked in production and manufacturing, 39 in research and development, and eight in other roles including control and project engineering. The case quickly drew widespread attention and backlash.Leaked audio recordings suggested the affected employees were given a choice between resigning with half a month’s salary as compensation or being reassigned to lower-paid frontline factory jobs, state-run news outlet China Daily reported.A fresh graduate who left the company told local outlet The Beijing News on Aug 26 that the company did not offer any room for negotiation when handling their termination."There was no negotiation, no communication, and no compromise throughout the entire process,” the unnamed graduate said.Local authorities said on Aug 25 that their investigation found that Xingyu had “conducted consultations in a simplistic and blunt manner”.“There was a lack of sufficient and effective communication, resulting in an adverse impact,” said the Changzhou Municipal Human Resources and Social Security Bureau.MANAGERS PUNISHED, GRADUATES COMPENSATEDXingyu issued an initial apology on Aug 27 before releasing a more detailed statement on Monday (Sep 7), acknowledging lapses and announcing disciplinary action against four managers.The company said management had erred in its assessment and acted “hastily” without fully considering that the graduates had only recently joined the company.Using similar language as the authorities, the firm said some staff members had been “simplistic and blunt” in talks with the graduates, causing “physical and mental harm”.“For this, we are deeply remorseful and deeply reflective,” Xingyu said, adding that it bears full responsibility for the criticism and public opinion directed at the company.The fallout has reached the company’s upper ranks.General manager Zhou Xiaoping will lose a year’s salary, while deputy general manager Li Shujun will lose six months’ salary and have his duties adjusted, Xingyu said.Human resources director Yu Zhiming, who had previously been suspended, was dismissed, while human resources department head Li Mei was demoted and reassigned.Xingyu has also offered financial and employment support to the affected graduates.Each has received a lump sum of 15,000 yuan (US$2,235) to ease living costs while they look for new jobs, and those who have not found employment within three months will be given six months' wages as compensation, the company said.Xingyu has also reimbursed the transport costs for students who travelled to Changzhou for recruitment and provided free accommodation for those staying in company dormitories.As of Monday, 71 of the affected graduates had found jobs, the company said. Local authorities in Changzhou have also organised job fairs and recommended vacancies to them.SCRUTINY FROM GLOBAL AUTOMAKERSThe fallout has spread beyond China, drawing scrutiny from some of Xingyu’s key international customers.Xingyu manufactures and sells lighting products for major global automakers, including Volkswagen, Mercedes-Benz, BMW, as well as many Chinese electric vehicle brands.Volkswagen said on Sep 1 that it had begun an investigation into the dismissals and would take "appropriate steps" once its findings were complete, Reuters reported."Basic values and rights must be respected and protected across our entire supply chain, and we take any allegations of violations very seriously," Volkswagen said in a statement, describing the review as "standard procedure".Mercedes-Benz and BMW have also received details about the case and launched their own investigations into Xingyu, Chinese news outlet Sixth Tone reported on Sep 9, citing local media.