Hyundai investigating child labour in its US supply chain

Carmaker says it will sever ties with suppliers found to be using workers as young as 12

Reuters discovered a 12-year-old working at a plant controlled by Hyundai in Luverne, Alabama, US. Reuters
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Hyundai, South Korea's leading carmaker, is investigating child labour violations in its US supply chain and plans to "sever ties" with Hyundai suppliers in Alabama found to have relied on underage workers, the company's global chief operating officer Jose Munoz said.

A Reuters investigative report in July documented children, including a 12-year-old, working at a Hyundai-controlled metal stamping plant in rural Luverne, Alabama, called SMART Alabama.

After the report, Alabama's state Department of Labour, in co-ordination with federal agencies, began investigating SMART Alabama. Authorities subsequently launched a child labour probe at another of Hyundai's regional supplier plants, Korean-operated SL Alabama, finding children as young as 13 working.

Mr Munoz said Hyundai intended to "sever relations" with the two Alabama supplier plants under scrutiny for underage labour "as soon as possible".

In addition, Mr Munoz told Reuters he had ordered a broader investigation into Hyundai's entire network of US auto parts suppliers for potential labour law violations and "to ensure compliance".

Mr Munoz's comments represent the Korean carmaker's most substantive public acknowledgement to date that child labour violations may have occurred in its US supply chain, a network of dozens of mostly Korean-owned auto-parts plants that supply Hyundai's massive vehicle assembly plant in Montgomery, Alabama.

Hyundai's $1.8 billion flagship US assembly plant in Montgomery produced nearly half of the 738,000 vehicles the carmaker sold in the United States last year, according to company figures.

The executive also pledged that Hyundai would push to stop relying on third party labour suppliers at its southern US operations.

As Reuters reported, migrant children from Guatemala found working at SMART Alabama, and SL Alabama had been hired by recruiting or staffing firms in the region. In a statement to Reuters this week, Hyundai said it had already stopped relying on at least one labour recruiting firm that had been hiring for SMART.

Mr Munoz told Reuters: "Hyundai is pushing to stop using third party labour suppliers, and oversee hiring directly."

SL Alabama said it had taken "aggressive steps to remedy the situation" as soon it learnt a subcontractor had provided underage workers. It terminated its relationship with the staffing firm, took more direct control of the hiring process and hired a law firm to conduct an audit of its employment practices, it said.

SMART Alabama did not immediately respond to a request for comment.

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Updated: October 21, 2022, 11:45 AM
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