Korean auto giant Hyundai investigating child labor in its U.S. supply chain

SL

19/10/2022 20:58

By Joseph White and Joshua Schneyer
       DETROIT, Oct 19 (Reuters) - Hyundai Motor Co
 005380.KS , Korea's top automaker, is investigating child labor
violations in its U.S. 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 told Reuters on Thursday. 
    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,
LLC.  urn:newsml:reuters.com:*:nL1N2Z22LS 
    Following the Reuters report, Alabama's state Department of
Labor, in coordination with federal agencies, began
investigating SMART Alabama. Authorities subsequently launched a
child labor probe at another of Hyundai's regional supplier
plants, Korean-operated SL Alabama, finding children as young as
age 13.  urn:newsml:reuters.com:*:nL1N2Z31MP urn:newsml:reuters.com:*:nL1N31C1YL  urn:newsml:reuters.com:*:nL1N2ZZ02J
    In an interview before a Reuters event in Detroit on
Thursday, Munoz said Hyundai intends to "sever relations" with
the two Alabama supplier plants under scrutiny for deploying
underage labor "as soon as possible." 
    In addition, Munoz told Reuters he had ordered a broader
investigation into Hyundai's entire network of U.S. auto parts
suppliers for potential labor law violations and "to ensure
compliance."
    Munoz's comments represent the Korean automotive 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 mostly Korean-owned auto-parts plants that supply
Hyundai's massive vehicle assembly plant in Montgomery, Alabama.
    Hyundai's $1.8 billion flagship U.S. assembly plant in
Montgomery produced nearly half of the 738,000 vehicles the
automaker 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 labor suppliers at its southern U.S.
operations. 
    As Reuters reported, migrant children from Guatemala found
working at SMART Alabama, LLC 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 labor recruiting firm that had been hiring for
SMART. 
    Munoz told Reuters: "Hyundai is pushing to stop using third
party labor suppliers, and oversee hiring directly." 
    Munoz did not offer further detail into how long Hyundai's
probe of its U.S. supply chain would take, when Hyundai or any
partner plants could end their dependence on third party
staffing firms for labor, or when Hyundai could end commercial
relationships with two existing Alabama suppliers investigated
for child labor violations by U.S. authorities. 
    Munoz's comments come on the same day that an investor group
working with union pension funds sent a letter to Hyundai,
pushing it to respond to reports of child labor at U.S. parts
suppliers, and warning of potential reputational damage to the
Korean automaker.  urn:newsml:reuters.com:*:nL1N31J1P0 
    The letter 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.      
    SL and Smart Alabama did not immediately respond to requests
for comment.
    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
EXCLUSIVE-Hyundai subsidiary has used child labor at Alabama
factory     urn:newsml:reuters.com:*:nL1N2Z31MP
Hyundai supplier accused of child labor violations by U.S.
authorities     urn:newsml:reuters.com:*:nL1N2ZZ02J
Hyundai, Kia auto parts supplier in Alabama fined for child
labor violations     urn:newsml:reuters.com:*:nL1N31C1YL
Investor group, unions push Hyundai to address child labor at
U.S. suppliers     urn:newsml:reuters.com:*:nL1N31J1P0
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Joseph White in Detroit and Joshua Schneyer in
New York; Additional reporting by Mica Rosenberg in New York and
Kristina Cooke in San Francisco;
Editing by David Gregorio)
 ((Kristina.Cooke@thomsonreuters.com))