Hyundai Motor Co is investigating child labor violations in its U.S. supply chain.
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Promises breaking up
It plans to “sever ties” with Hyundai suppliers in Alabama (US state) found to have used underage workers, the company’s global chief operating officer Jose Munoz told Reuters.
Munoz’s comments come on the same day that an investor group sent a letter to Hyundai urging it to respond to reports of child labor usage and warning of potential reputational damage.
In their letter they said that the use of child labor violated international standards Hyundai committed to in its Human Rights Charter and its own code of conduct for suppliers.
What they discovered
A Reuters investigative report in July found children, including a 12-year-old, working at a Hyundai-controlled metal stamping plant in Alabama, called SMART Alabama, LLC.
Following the findings, Alabama’s state Department of Labor along with federal agencies began investigating the plant.
They launched a child labor probe at another of Hyundai’s regional supplier plants, Korean-operated SL Alabama, finding children as young as age 13.
Cover-up statements
Munoz said Hyundai intends to “sever relations” with the two Alabama supplier plants that are being probed for employing underage labor “as soon as possible.”
Additionally, Munoz told Reuters he had ordered a broader investigation into the company’s entire network of U.S. auto parts suppliers for potential labor law violations and “to ensure compliance.”
The comments represent the Korean automotive giant’s most important public acknowledgment yet that child labor violations may have occurred in its U.S. supply chain.
Where evidence was found
Its $1.8 billion flagship U.S. assembly plant in Montgomery, Alabama produced nearly half of the 738,000 vehicles the automaker sold in the United States last year.
The plant is Hyundai’s massive vehicle assembly plant which receives auto-parts supplied by a network of dozens of mostly Korean-owned auto-parts plants
Munoz fuhrer pledged that the company will try to stop relying on third party labor suppliers at its southern U.S. operations.
Migrant children from Guatemala in particular, were found working at the plant where kids like them were hired by recruiting or staffing firms in the region.
Taking control of recruitment
This week, Hyundai said it had already stopped relying on at least one labor recruiting firm that had been hiring for the plant and will oversee hiring directly.
Another of Hyundai’s regional supplier plants, Korean-operated SL Alabama also being investigated said it had taken “aggressive steps to remedy the situation” immediately when it learned 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.
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