Exclusive: Hyundai subsidiary used child labor at Alabama plant

LOVERN, Alabama (Reuters) – A subsidiary of Hyundai Motor Co. used child labor at a plant that provides parts for the Korean automaker’s assembly line in nearby Montgomery, Alabama, according to area police, the family of three underage workers. and eight former and current employees of the factory.

These people said that minor workers, in some cases as young as 12, had recently worked in a metal stamping plant operated by SMART Alabama LLC. SMART, listed by Hyundai in corporate filings as a majority-owned unit, supplies parts for some of the most famous cars and SUVs made by the Montgomery automaker, the leading American assembly plant.

In a statement sent after Reuters first published its findings on Friday, Hyundai (005380.KS) said it “does not tolerate illegal employment practices at any Hyundai entity. We have policies and procedures in place that require compliance with all local and state procedures.” and federal laws.” She did not answer detailed questions from Reuters about the findings.

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SMART, in a separate statement, said it follows federal, state and local laws and “denies any claim that it knowingly hired anyone ineligible to hire.” The company said it relies on temporary employment agencies to fill jobs and expects “these agencies to abide by the law in the recruitment, hiring and employment of workers in its facilities.”

SMART did not answer specific questions about the workers cited in this story or scenes at work that they and other people familiar with the plant described.

Reuters learned of the presence of underage workers at the Hyundai-owned supplier after the brief disappearance in February of a Guatemalan immigrant child from her family’s home in Alabama.

The girl, who turns 14 this month, and her two siblings, ages 12 and 15, all worked at the factory earlier this year and did not go to school, according to people familiar with their work. Their father, Pedro Tze, confirmed these people’s accounts in an interview with Reuters.

Police in Enterprise, the hometown of the Tze family, told Reuters that the girl and her siblings worked for Smart. The police, who helped locate the missing girl, set the time to search for her by name in a public alert.

Reuters is not using her name in this article because she is a minor.

The Enterprise Police force, about 45 miles from the factory in Luverne, has no jurisdiction to investigate potential labor law violations at the factory. Instead, Enterprise Police investigator James Sanders told Reuters that the force notified the state attorney general’s office after the incident.

Mike Lewis, a spokesman for the Alabama Attorney General’s Office, declined to comment. It is unclear whether the Bureau or other investigators have contacted SMART or Hyundai about potential violations. On Friday, in response to a Reuters report, a spokesperson for the Alabama Department of Labor said it would coordinate with the US Department of Labor and other agencies to investigate.

Pedro Tze’s children, who are now enrolled in the upcoming semester, were among a larger group of underage workers who have found jobs at the Hyundai-owned supplier over the past few years, according to interviews with dozens of former and current factory employees and workers. recruits.

They said many of these minors have dropped out of school in order to work long shifts at the factory, a sprawling facility with a documented history of health and safety violations, including the risk of amputations.

Most of the current and former employees who spoke with Reuters did so on the condition of anonymity. Reuters was unable to determine the exact number of children who may have worked in the SMART plant, what were paid to minors, or other terms of their employment.

Revelations of child labor in Hyundai’s US supply chain could trigger a consumer, regulatory and reputational backlash for one of the world’s most powerful and profitable automakers. In its “Human Rights Policy” posted online, Hyundai says it prohibits child labor in all of its workforce, including suppliers.

The company recently said it will expand into the United States, and plans more than $5 billion in investments including a new electric vehicle plant near Savannah, Georgia.

“Consumers should be outraged,” said David Michaels, a former US assistant secretary of labor for the Occupational Safety and Health Administration, or OSHA, whose findings were seen by Reuters.

“They should know that these cars are being built, at least in part, by workers who are children and need to be in school rather than risk their lives and limbs because their families desperately need the income,” he added.

At a time when the United States is experiencing labor shortages and supply chains being disrupted, employment experts told Reuters there is an increased risk that children, especially illegal immigrants, will end up in dangerous and illegal workplaces for minors.

In Enterprise, home to a busy poultry industry, Reuters chronicled earlier this year how a Guatemalan minor, who immigrated to the United States alone, found work at a local chicken processing plant, Read more.

‘Way too small’

Alabama and federal laws limit minors under the age of 18 from working in metal stamping and pressure operations such as SMART, where proximity to dangerous machinery can put them at risk. Alabama law also requires that children 17 years of age or younger be enrolled in school.

Michaels, now a professor at George Washington University, said safety at Hyundai suppliers in the United States was a frequent concern at OSHA during his eight years leading the agency until his departure in 2017. Michaels visited Korea in 2015, and said he warned the company Hyundai executives that the great demand for spare parts ‘just in time’ caused security holes.

The SMART plant builds parts for the popular Elantra, Sonata and Santa Fe, which as of June made up nearly 37% of Hyundai’s sales in the United States, according to the automaker. Federal records show that the plant has received repeated penalties from the Occupational Safety and Health Administration (OSHA) for health and safety violations.

A Reuters review of records shows that SMART has been valued at at least $48,515 in OSHA penalties since 2013, and was fined as recently as this year. OSHA’s SMART inspections have documented violations including plant crushing and amputation risks.

The plant, whose website says it has the capacity to supply parts for up to 400,000 cars each year, has also struggled to retain labor to keep up with Hyundai’s demand.

In late 2020, SMART wrote a letter to US consular officials in Mexico requesting a visa for a Mexican worker. The letter, written by Gary Sport, managing director of Smart and reviewed by Reuters, said the plant was “severely understaffed” and Hyundai “would not tolerate such shortfalls.”

SMART did not answer Reuters questions about the letter.

Earlier this year, lawyers filed a class action lawsuit against SMART and several recruiting firms that help provide workers with US visas. The lawsuit, filed in the US District Court for the Northern District of Georgia on behalf of a group of about 40 Mexican workers, alleges that some of the employees, who were hired as engineers, were ordered to work menial jobs instead.

Smart in court documents called the allegations in the lawsuit “unsubstantiated” and “merited.”

Many of the factory’s minors were hired through employment agencies, according to current and former SMART workers and local employment agencies.

Although recruiters help to fill industrial jobs nationwide, they have often been criticized by job advocates for enabling large employers to outsource the responsibility to check the eligibility of employees to work.

There are about 50 underage workers between different shifts at the plant, said a former SMART worker, an adult immigrant who left for another job in the auto industry last year, adding that he knows some of them personally. Another SMART adult worker, a US citizen who left the factory last year, said she worked with about a dozen minors on her shift.

Another former employee, Tabatha Moultry, 39, worked on the SMART assembly line for several years through 2019. Moultry said the plant has achieved high turnover and is increasingly reliant on migrant workers to keep up with intensive production demands. She said she remembered working with an immigrant girl who “looked like 11 or 12 years old”.

Poultry said that the girl would come to work with her mother. When I asked Moultry her real age, the girl said she was thirteen years old. Poultry did not provide further details about the girl and Reuters could not independently confirm her account.

Tze, the father of the missing girl, called Enterprise Police on February 3, after she did not return home. Police have issued an amber alert, which is a general warning when law enforcement believes a child is in danger.

They also launched a hunt for Alvaro Cocol, 21, another Guatemalan immigrant and SMART worker around the time who Tze thought might be with her. Using mobile phone geolocation data, police located Kokol and the girl in a parking lot in Athens, Georgia.

The girl told the officers that Kokol was a friend and that they traveled there to look for other job opportunities. Kokul was arrested and later deported, according to people familiar with his deportation. Kukul did not respond to a Facebook message from Reuters requesting comment.

After the disappearance led to local news coverage, SMART fired a number of underage workers, according to former employees and other local residents familiar with the plant. The sources said that the police interest raised fears that the authorities may soon take strict measures against other underage workers.

Father Tze once worked for SMART and now does odd jobs in the construction and forestry industries. He told Reuters he regretted that his children had gone to work. He added that the family needed whatever income they could get at the time, but is now trying to move on.

“It’s all over now,” he said. “The children are not working and in the fall they will be at school.”

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Editing by Paolo Prada

Our Standards: Thomson Reuters Trust Principles.

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