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Hyundai Engine Co, Korea's top automaker, is exploring kid work infringement in its U.S. production network and plans to "disavow" with Hyundai providers in Alabama found to have depended on underage laborers, the organization's worldwide head working official Jose Munoz told Reuters on Wednesday.
A July Reuters investigation revealed that children, including a 12-year-old, were employed at SMART Alabama, LLC, a metal stamping plant in rural Luverne, Alabama, controlled by Hyundai.
Alabama's state Department of Labor and federal agencies began looking into SMART Alabama following the Reuters report.After that, a child labor investigation was launched by authorities at another of Hyundai's regional supplier plants, Korean-owned SL Alabama, where children as young as 13 were found.
Munoz stated that Hyundai intends to "sever relations" with the two Alabama supplier plants under investigation for employing underage labor "as soon as possible" in an interview prior to a Reuters event in Detroit on Wednesday.
Munoz also told Reuters that he had ordered a larger investigation into Hyundai's entire network of U.S. auto parts suppliers to "ensure compliance" and look for potential violations of labor laws.
The most substantial public admission that the Korean automaker may have engaged in child labor in its U.S. supply chain—a network of dozens of mostly Korean-owned auto-parts plants that supply Hyundai's massive vehicle assembly plant in Montgomery, Alabama—has been made by Munoz.
According to company figures, nearly half of the 738,000 automobiles that Hyundai sold in the United States last year were produced at its flagship $1.8 billion assembly plant in Montgomery.
The executive also said that Hyundai would try to get its southern U.S. operations to stop using third-party labor suppliers.
According to a report from Reuters, recruiting or staffing firms in the region had hired Guatemalan migrant children who were working at SMART Alabama, LLC and SL Alabama.Hyundai said this week that it had already stopped relying on at least one labor recruiting firm that had been hiring for SMART. This statement was made to Reuters.
According to Munoz, Reuters:Hyundai wants to eliminate the use of third-party labor providers and direct hiring oversight.
Munoz did not provide any additional information regarding the length of time that Hyundai's investigation of its U.S. supply chain would take, the date by which Hyundai or any partner plants could end their reliance on third-party staffing firms for labor, or the date by which Hyundai could end its commercial relationships with two existing Alabama suppliers that are the subject of U.S. authorities' investigations for child labor violations.
SL Alabama said in a statement on Wednesday that as soon as it learned that a subcontractor had provided underage workers, it had taken "aggressive steps to remedy the situation."It claimed that it hired a law firm to conduct an audit of its employment practices, took more direct control over the hiring process, and ended its relationship with the staffing company.
A request for clarification was not immediately met by SMART Alabama.
The remarks made by Munoz come on the same day that a group of investors comprised of union pension funds sent a letter to Hyundai urging it to respond to reports of child labor at U.S. parts suppliers and advising the Korean automaker of the potential for damage to its reputation.
According to the letter, Hyundai's use of child labor contravened both its own supplier code of conduct and the international standards to which it had committed in its Human Rights Charter.
