José Muñoz, global president and chief operating officer for Hyundai, told the news organization Wednesday that Hyundai intends to “sever relations” with suppliers SL Alabama and SMART Alabama LLC “as soon as possible.”
Both companies operate factories in Alabama supplying the Korean automotive giant with parts for use at its Montgomery manufacturing plant.
In a statement to the Montgomery Advertiser, part of the USA TODAY Network, Hyundai spokesperson Ira Gabriel said the company’s investigation into the suppliers is continuing.
“Our investigation remains ongoing, and we are working with authorities in their inquiry of this matter. Hyundai is committed to its suppliers who comply with the long-standing federal, state, and local labor laws and will not hesitate to move to sever its relationship with any supplier found violating our stringent policies,” Gabriel said.
Muñoz told Reuters that he ordered a more comprehensive investigation into Hyundai’s network of U.S. auto parts suppliers for any potential labor violations. Neither Gabriel nor Muñoz said when Hyundai may sever ties with the two suppliers or how long the investigation into its American supply chain will take.
The saga into possible child labor at the factories began in July when Reuters reported that SMART Alabama had employed underage workers as young as 12 years old at its metal stamping and welding plant in Luverne, Alabama.
The Alabama Department of Labor got involved shortly after, launching an investigation into SMART Alabama’s practices.
Just a month later, the U.S. Department of Labor sued SL Alabama, a subsidiary of the South Korean SL Corp, for violating labor laws since November 2021 by employing children under the age of 16 at its Alexander City factory. The factory makes headlights, rear combination lights, and side mirrors for auto companies including Hyundai and Kia.
The U.S. Department of Labor and SL Alabama reached a consent agreement in September to punish responsible management personnel, cut ties with subcontractors who had employed child labor, and institute greater oversight of its hiring practices.
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The department fined SL Alabama $30,000 earlier this month for the violations, Reuters reported.
Reuters previously reported that migrant children were recruited to work at the supplier by recruiting or staffing firms.
The possible move away from SL Alabama and SMART Alabama may be part of a bigger push by Hyundai to stop relying on third-party labor suppliers. Muñoz told Reuters that the company “is pushing to stop using third party labor suppliers, and oversee hiring directly,” but didn’t provide details of when that would happen.
In a statement, SL Alabama said a staffing agency for its Alexander City factory represented the underage workers “to be of legally employable age.” SL Alabama said it was not aware of the child labor violations when they were occurring.
SL Alabama also said it has taken several steps aimed at remedying the situation and ensuring it does not recur, including terminating the relationship with the staffing agency that hired underage workers, engaging an independent law firm to conduct an audit of its employment practices, creating an employment policies training program and taking steps to create a “remedial education program” for the affected children.
“SL Alabama takes very seriously its responsibility to fully comply with all applicable laws and regulations concerning its manufacturing operations. The company strongly condemns, and certainly does not condone or permit, the employment of underage workers at its facilities and has never knowingly employed minors to work at any of its facilities,” the company said in a statement.
SMART Alabama did not respond to requests for comment sent Friday.
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