The new owners of MG Rover have ditched plans to set up an accommodation block at the Longbridge factory because of "ill feeling" in the community.
The claim from a local councillor comes after The Birmingham Post learned that Nanjing Automotive Corporation is looking at an alternative site to house more than 400 Chinese workers.
The company had originally lodged an application with Birmingham City Council to convert an office, at the plant's South Engineering Block on Lickey Road, into temporary accommodation with four shower units.
The residences were to house scores of Chinese workers who would decide which assets would remain at Longbridge or go to China. The plan reignited fears in the community that Nanjing is planning a "lift and shift" operation at the plant.
Coun Reg Corns (Con Northfield) claims the recent decision by Nanjing to locate the workers in what is understood to be the Stoneleigh area of Warwickshire has been taken because the local community would be opposed to "undisclosed" plans for Longbridge.
He said: "It is pretty obvious to me that they have changed their arrangements because there is ill feeling in the community.
"I believe this is political gerrymandering. Nanjing believe there is going to be opposition to them converting offices and living in accommodation at Longbridge."
Coun Ken Hardeman (Con Brandwood), the council's cabinet member for regeneration, said Nanjing switched locations because it was concerned that it would not meet planning guidelines for residential use at Longbridge.
However, he added: "The media have picked up that putting over 400 people on a site that is sensitive to the local community might be difficult.
"I do not want to make suggestions that they have took this decision because of public concern because I do not think that is the case.
"But some people have felt there is a possibility that they have to be sensitive to the local community."