Damage control: Visitors look at an electric global modular platform for Hyundai Ioniq 5 at an auto show in Asia. The South Korean auto giant says it intends to sever relations with the two Alabama supplier plants under scrutiny for deploying underage labour as soon as possible. — Bloomberg
DETROIT: Hyundai Motor Co, South Korea’s top automaker, 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 has told Reuters.
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.
Following the report, Alabama’s state Department of Labour, in coordination with federal agencies, began investigating SMART Alabama.
Authorities subsequently launched a child labour probe at another of Hyundai’s regional supplier plants, South Korean-operated SL Alabama, finding children as young as age 13.
In an interview before a Reuters event in Detroit on Wednesday, Munoz said Hyundai intends to “sever relations” with the two Alabama supplier plants under scrutiny for deploying underage labour “as soon as possible.”
In addition, Munoz said 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”.
Munoz’s comments represent the South Korean automotive giant’s most substantive public acknowledgment to date that child labour violations may have occurred in its US supply chain, a network of dozens of mostly South Korean-owned auto-parts plants that supply Hyundai’s massive vehicle assembly plant in Montgomery, Alabama.
Hyundai’s US$1.8bil (RM8.5bil) 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 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, 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 labour recruiting firm that had been hiring for SMART.
Munoz told Reuters: “Hyundai is pushing to stop using third-party labour suppliers, and oversee hiring directly.”
Munoz did not offer further detail into how long Hyundai’s probe of its US supply chain would take, when Hyundai or any partner plants could end their dependence on third-party staffing firms for labour, or when Hyundai could end commercial relationships with two existing Alabama suppliers investigated for child labour violations by US 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 labour at US parts suppliers. — Reuters
