Hyundai investigates child labor among US suppliers

WHAT YOU NEED TO KNOW:

• Two Alabama auto-parts plants that supply Hyundai’s flagship assembly plant have been found to employ underage workers.
• Hyundai’s global COO José Muñoz has launched an investigation into all U.S. suppliers and vowed to “sever ties” with the Alabama suppliers.
• Muñoz added that the company will end its dependence on third-party labor suppliers.

Korea’s top automaker, Hyundai, has launched an investigation into child labor among its suppliers in the U.S. During an interview with Reuters on Wednesday, the company’s global chief operating officer José Muñoz vowed to “sever ties” with Alabama suppliers found to have hired underage workers.

In July, Reuters reported that children, including a 12-year-old, have been found working at SMART Alabama, LLC, a Hyundai-controlled metal stamping plant in rural Luverne, Alabama.

Federal agencies and Alabama’s state Department of Labor soon investigated SMART Alabama and another regional supplier plant, Korean-operated SL Alabama, which was found to have employed children as young as 13.

According to the Reuters report, local recruiting or staffing firms hired migrant children from Guatemala to work at SMART Alabama and SL Alabama.

Muñoz told Reuters that Hyundai intends to “sever relations” with the two Alabama supplier plants “as soon as possible.” He added that a broader investigation has been launched into the company’s entire network of U.S. suppliers “to ensure compliance.”

Hyundai’s U.S. supply chain involves dozens of mostly Korean-owned auto-parts plants that serve as suppliers to its $1.8 billion flagship assembly plant in Montgomery, Alabama. Company figures state that the Montgomery plant produced almost half of the 738,000 Hyundai vehicles sold in the U.S. last year.

This week, Hyundai stated that it had severed its commercial relationship with at least one recruiting firm for SMART. Muñoz also vowed that the company will end its dependence on third-party labor suppliers.

Muñoz did not provide a timeline into how quickly the measures will be enacted or how long the investigation will take.

On Wednesday, SL Alabama announced that it had taken “aggressive steps to remedy the situation” as soon as they learned of the information. It has since ended its relations with the staffing firm to take more direct control of the hiring process. It also hired a law firm for an audit of its employment practices.

SMART Alabama has yet to provide any comment.

The statement from Muñoz came the same day that an investor group allied with union pension funds wrote to Hyundai to push the company to address the reports of child labor. The group warned that such reports could damage the automaker’s reputation. They added that employing children violates Hyundai’s Human Rights Charter and its own code of conduct.

Source: Reuters