Three months after a Reuters investigation uncovered the use of child labor within Hyundai’s supply chain in Alabama, the company finally is taking steps to punish the two suppliers involved.
Hyundai intends to “sever relations” with SMART Alabama and another contractor, SL Alabama, “as soon as possible,” Global Chief Operating Officer José Muñoz told Reuters in October.
This has been a shocking tale of supply chain malfeasance that represents, at the least, a complete breakdown of Hyundai’s obligation to supervise its contractors. The lack of oversight runs especially deep at SMART, because it is majority-owned by Hyundai, Reuters reported.
One worker at SMART, a metal stamping plant, was a migrant girl who “looked 11 or 12 years old,” said Tabatha Moultry, 39, a former employee. Three children of Guatemalan immigrant Pedro Tzi – a 14-year-old girl and her two brothers, 12 and 15 – were among a larger group of minors working more recently at SMART, which is in Luverne, Ala., Reuters reported.
Alabama and federal agencies launched investigations of both facilities. Reuters said SL Alabama, which makes headlights and other components for Hyundai, Kia, and others, admitted that children hired by an outside recruiter worked at the SL plant in Alexander City. The federal government confirmed SL Alabama’s violation of the law.
“Our investigation found SL Alabama engaged in oppressive child labor by employing young workers under the minimum age of 14, and by employing minors under 16 in a manufacturing occupation,” the U.S. Labor Department said in a statement.
Hyundai operates a major assembly line in Montgomery, Ala., and like other manufacturers relies on a large network of suppliers and subcontractors. Suppliers were short on labor and hired migrant workers, Reuters reported, using recruiting and staffing firms to fill some positions.
Reuters reporter Mica Rosenberg told NPR that outside staffing agencies can have lax hiring practices, using minimal checks to examine whether employers are legally permitted to work.
How much did Hyundai executives know about the hiring practices of agencies filling positions in its Alabama supply chain? It’s unclear.
“Sometimes companies can kind of use (outside staffing firms) as a buffer if there’s, you know, unsavory hiring practices, and they can say they didn’t know what was going on because the workers came from staffing firms,” Rosenberg said. “But we did speak to former workers who were working alongside some of these younger minors and told us that there was no way that they looked old enough to work, even if they might not, you know, admit their age when they’re on the line.”
The United Auto Workers union doesn’t want to see Hyundai fire the contractors. “By severing ties with these Alabama suppliers, hundreds of workers in these plants will likely lose their jobs, creating a crisis for workers, their families, and their communities – without doing anything to fix the problem,” UAW President Ray Curry said.
That’s a bad take. Companies, and unions, should have zero tolerance for the illegal use of child labor or lax practices by hiring firms.
Hyundai needs to come clean about everything that happened in Alabama and how it happened, to preserve its own integrity, and protect all minors who might be in danger of being abused and exploited by unscrupulous companies and hiring agencies.
Read the complete Issue 23 of ChainMail here.
Enjoying this story? Subscribe to ChainMail, MxD’s newsletter on breaking supply chain news, trends, and updates.