Hyundai, one of the biggest auto manufacturers in the world, has found itself under investigation for child labor violations in its supply chain.
The company is planning to sever ties with two of its Alabama suppliers after it came to light that they reportedly were employing minors as young as 12, Reuters reported.
The suppliers are a Hyundai-controlled metal stamping plant in Luverne, Ala., called SMART Alabama, LLC, and the Korean-operated SL Alabama, according to the report.
According to the Daily Mail, some of the children have been identified as migrants from Guatemala who were hired by a staffing firm operating in that region.
Alabama state and federal officials began an investigation in February when 13-year-old Eidy Aracely Tzi Coc reportedly ran away with another Luverne plant employee, Alvaro Cucul, 21, the Daily Mail reported. The Daily Mail noted that the young girl was recovered and is safe.
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Coc’s father, Pedro Tzi, confirmed in an interview that Coc and her two brothers, who were 12 and 15, all worked at the plant and were not attending school.
A July report by Reuters did not specify the total number of minors believed to have been working at the SMART plant in Luverne, but said Tzi’s children “were among a larger cohort of underage workers” who had “foregone schooling in order to work long shifts at the plant, a sprawling facility with a documented history of health and safety violations, including amputation hazards.”
The story quoted one anonymous adult former worker at SMART as saying there were “around 50 underage workers between the different plant shifts,” and another former adult worker as saying “she worked alongside about a dozen minors on her shift.”
At the time, SMART responded that it follows federal, state and local laws and “denies any allegation that it knowingly employed anyone who is ineligible for employment,” Reuters reported.
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Hyundai’s global chief operating officer Jose Munoz told Reuters his company will not only end its relations with the staffing companies involved, but would also investigate its entire U.S supply chain in case of more violations.
“Hyundai is pushing to stop using third party labor suppliers, and oversee hiring directly,” he told the news outlet.
SL Alabama released a statement this week, stating that they were taking ‘aggressive steps to remedy the situation.’
Local officials in Tallapoosa County and Alexander City, where the SL plant is located, are calling for the supplier to apologize for the situation, according to AL.com.
A statement by the Lake Martin Area Economic Development Alliance said the federal complaint allegations are “egregious and unconscionable and demonstrate an utter disregard for the good faith support of all entities who worked to bring SL Alabama to the Lake Martin area.”
The suppliers helped supply Hyundai’s flagship assembly plant, based in Montgomery, Alabama, with raw materials.
The Montgomery plant cost $1.8 billion and is responsible for producing nearly half of the Hyundai vehicles sold in the United States, with a whopping 738,000 sold last year, according to Reuters.
On top of the ethical implications, the auto giant has also been threatened with financial penalties.
The SOC Investment Group, which deals with union pension funds, sent a blunt letter to the company regarding the violations. SOC holds more than $250 billion in assets.
“Child labor and poor workplace health and safety have regulatory and legal repercussions for Hyundai in the U.S. and can cause reputational damage across the globe,” the letter stated.
The group has called for an extensive investigation.
