Hyundai Motor Co, Korea’s largest automaker, is investigating child labor violations in its U.S. supply chain and plans to “cut ties” with Hyundai suppliers in Alabama that rely on underage workers, said the director of global operations at Hyundai Motor Co. company, Jose Munoz, told Reuters on Wednesday (19).
A Reuters investigative report in July documented children, including a 12-year-old, working at a Hyundai-owned metal stamping plant in rural Luverne, Alabama called SMART Alabama, LLC.
Following the Reuters report, the Alabama State Department of Labor, in coordination with federal agencies, began investigating SMART Alabama.
Authorities later launched a child labor investigation at another Hyundai regional supplier plant, SL Alabama, operated by Korea, finding children as young as 13.
In an interview ahead of a Reuters event in Detroit on Wednesday, Munoz said Hyundai intends to “cut ties” with the two Alabama supply plants under scrutiny for employing smaller labor “as soon as possible”.
In addition, Munoz told Reuters he had ordered a broader investigation into Hyundai’s entire US auto parts supplier network for potential labor law violations and “to ensure compliance”.
Munoz’s comments represent the Korean auto giant’s most substantive public acknowledgment to date that child labor violations may have occurred in its U.S. supply chain, a network of dozens of primarily Korean-owned auto parts factories that supply the massive Hyundai 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 automaker sold in the United States last year, according to company data.
The executive also promised that Hyundai would push to stop relying on third-party labor providers for its southern US operations.
As reported by Reuters, Guatemalan migrant children found working at SMART Alabama, LLC and SL Alabama were employed by recruiting or staffing companies in the region.
In a statement to Reuters this week, Hyundai said it had already stopped relying on at least one manpower recruitment firm that was hiring for SMART.
Munoz told Reuters: “Hyundai is pushing to stop using third-party labor providers and oversee hiring directly.”
Munoz offered no further details on how long Hyundai’s investigation into its U.S. supply chain would take, when Hyundai or any partner factories could end their dependence on third-party labor companies, or when Hyundai could terminate business relationships with two Alabama’s existing suppliers investigated for child labor violations by US authorities.
In a statement on Wednesday, SL Alabama said it took “aggressive steps to remedy the situation” as soon as it learned that a subcontractor had supplied underage workers.
He ended his relationship with the recruiting firm, took more direct control of the hiring process and hired a law firm to conduct an audit of his employment practices, he said.
SMART Alabama did not immediately respond to a request for comment.
Munoz’s comments come on the same day that a group of investors working with union pension funds sent a letter to Hyundai, urging it to respond to reports of child labor at US parts suppliers and warning of possible reputational damage. from the Korean automaker.
The letter said that the use of child labor violated international standards that Hyundai has committed to in its Charter of Human Rights and its own code of conduct for suppliers.
Source: CNN Brasil
Joe Jameson, a technology journalist with over 2 years of experience, writes for top online news websites. Specializing in the field of technology, Joe provides insights into the latest advancements in the industry. Currently, he contributes to covering the world stock market.
