Jose Munoz, the company's global chief operating officer, said that Hyundai Motor Co., Korea's largest automaker, is looking into allegations of child labor violations in its U.S. supply chain and intends to "sever ties" with Hyundai suppliers in Alabama that were found to have employed minors.
Children, including a 12-year-old, were found to be employed at the metal stamping facility known as SMART Alabama, LLC, which is located in rural Luverne, Alabama, according to a July investigative report. SMART Alabama is being looked into by the state of Alabama's Department of Labor in collaboration with federal agencies. Following this, authorities opened a child labor investigation at SL Alabama, a Korean-operated facility that was a Hyundai regional supplier, and discovered youngsters as young as 13.
Munoz ordered a wider investigation into Hyundai's entire network of US auto parts suppliers for potential labor law violations and "to ensure compliance," and in an interview stated that Hyundai intends to "sever relations" with the two Alabama supplier plants under investigation for using underage labor "as soon as possible."
Munoz's remarks represent the Korean automaker's most thorough admission to date that possible child labor violations may have taken place in its US supply chain, which consists of a network of dozens of mostly Korean-owned auto-parts factories that feed Hyundai's sizable vehicle assembly plant in Montgomery, Alabama.
According to corporate statistics, Hyundai's flagship U.S. assembly facility in Montgomery, which cost $1.8 billion, produced nearly half of the 738,000 cars the manufacturer sold in the country last year. The executive promised that Hyundai would work to have its southern US facilities no longer rely on outside labor providers.
As previously reported, local staffing or recruitment companies in the area employed migrant youngsters from Guatemala who were discovered working at SMART Alabama, LLC and SL Alabama. Hyundai claimed it had already stopped relying on at least one labor recruiting company that had been hiring for SMART.
Munoz did not provide any additional information regarding the length of the investigation into Hyundai's U.S. supply chain, the date on which Hyundai or any partner plants could stop relying on external staffing companies for labor, or the date on which Hyundai could sever its business ties with two current Alabama suppliers who were under investigation by U.S. authorities for using child labor.
In the letter, Hyundai breached the international standards it agreed to uphold in its Human Rights Charter and its own code of conduct for suppliers by using underage labor.