Fuyao Glass Plunges Despite Chinese Auto Glass Giant Saying US Unit Isn’t Target of Probe(Yicai) July 29 -- Shares of China’s Fuyao Glass Industry Group tumbled despite the world's largest supplier of auto glass saying its subsidiary in the United States was not the target of an investigation after local government agencies searched the unit.
Fuyao Glass [SHA: 600660] ended 5.9 percent lower at CNY44.46 (USD6.10) a share in Shanghai today. Its Hong Kong-listed stock [HKG: 3606] sank 7 percent to HKD41.25 (USD5.28).
Fuyao Glass America cooperated with a probe by US government agencies of a third-party labor supplier, its Fuqing-based parent company said yesterday, adding that the Ohio unit is operating normally.
The subsidiary was searched on July 26 and some production was halted during it, which did not impact the shipment and delivery of products, Fuyao Glass said. Normal operations were resumed after the search ended the same day, it noted.
A US Department of Homeland Security agent told workers at Fuyao Glass America that the firm was not under investigation and there was no intention to arrest anyone that day, according to an audio recording from inside the factory that has been posted to social media.
Fuyao Glass was set up in 1987 and has a more than 30 percent share of the global market for auto glass. Its net profit surged 52 percent to CNY1.4 billion (USD193 million) in the first quarter from a year earlier, while operating revenue jumped 25 percent to CNY8.8 billion. About 45 percent of the firm’s CNY33.2 billion (USD4.6 billion) income last year was from overseas markets.
In 2014, Fuyao Glass bought General Motors' plant in Moraine, Ohio, spending USD600 million to rebuild it and put it into operation with more than 2,500 local workers. Its struggle with the labor union was turned into American Factory, a documentary first released in 2019.
US law enforcement agencies executed search warrants at 28 locations in Ohio, including Fuyao Glass' factory in Moraine, as part of an investigation into allegations of "financial crimes and labor exploitation," local television station WDTN reported.
Editor: Martin Kadiev
