Hyundai Motor [005328:KS], South Korea’s top automaker, is investigating child labor violations in its US supply chain, as reported by Reuters on October 22. The company stated that it will cut ties with two Alabama auto parts suppliers found employing underage workers as soon as possible. The two accused factories, SMART Alabama and SL Alabama, supply Hyundai’s massive vehicle assembly plant in Montgomery, Alabama. Hyundai Global CEO, Jose Munoz, has ordered a broader investigation into Hyundai’s entire US supply chain for potential labor law violations to ensure compliance. Munoz also promised that Hyundai would ease its reliance on third-party labor suppliers and work towards overseeing hiring directly. 

The accusations of child labor violations against Hyundai started in July when Reuters reported that Hyundai-affiliated SMART Alabama employed underage workers as young as 12 years old at its metal stamping and welding plant. A month later, the US Department of Labor charged SL Alabama, a South Korean SL Corporation subsidiary, with employing children under the age of 16. SL Alabama claimed that it had taken measures to rectify the situation as soon as it learned a subcontractor had provided underage workers. Meanwhile, Hyundai terminated collaborations with at least one labor recruiting firm that served SMART Alabama. According to a letter sent to Hyundai from an investor group working with union pension funds, the use of child labor breached the international standards Hyundai has committed to in its Human Rights Charter, as well as the company’s own code of conduct for suppliers.

Sources:

https://www.reuters.com/business/autos-transportation/exclusive-korean-auto-giant-hyundai-investigating-child-labor-its-us-supply-2022-10-19/

https://www.reuters.com/world/us/exclusive-hyundai-subsidiary-has-used-child-labor-alabama-factory-2022-07-22/

https://www.usatoday.com/story/money/2022/10/24/hyundai-to-drop-alabama-suppliers-child-labor/10587977002/