Exclusive: The Hyundai subsidiary used child labor at its Alabama factory Leonard ParkerJuly 22, 2022

 Child Labor at Alabama Hyundai Factory

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LUVERNE, Alabama, July 22 (Reuters) – A subsidiary of Hyundai Motor Co has used child labor at a plant that supplies parts for the Korean automaker’s assembly line in nearby Montgomery, Alabama, according to local police, the family of three underage workers, and eight former and current factory employees.

Underage workers, in some cases as young as 12, recently worked at a metal stamping facility operated by SMART Alabama LLC, these people said. SMART, listed by Hyundai in company filings as a majority-owned entity, supplies parts for some of the most popular cars and SUVs built by the automaker in Montgomery, its flagship US assembly plant.

Hyundai (005380.KS) did not respond to calls or emails from Reuters for comment.

SMART said in a statement that it complies with federal, state and local laws and “denies any allegation that it knowingly employed anyone who is ineligible for employment.” The company said it relies on temporary employment agencies to fill positions and expects “these agencies to follow the law when recruiting, hiring and placing workers on its premises.”

SMART did not answer specific questions about the workers cited in this story or work scenes that it and others familiar with the factory have described.

Reuters learned of underage workers at the Hyundai-owned supplier after a Guatemalan migrant child briefly disappeared from his family’s Alabama home in February.

The girl, who will turn 14 this month, and her two brothers, ages 12 and 15, were all working at the plant earlier this year and were not going to school, according to people familiar with their jobs. Her father, Pedro Tzi, confirmed the portrayal of these people in an interview with Reuters.

Police in Enterprise, the Tzi family’s adopted home, told Reuters that the girl and her siblings worked at SMART. Police, who helped locate the missing girl, identified her by name in a public alert at the time of their search.

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

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

Mike Lewis, a spokesman for the Alabama Attorney General, declined to comment. It’s unclear if the bureau or other investigators have contacted SMART or Hyundai about possible violations.

Pedro Tzi’s children, who are now enrolled for the upcoming school year, were among a larger group of underage workers who have found work at the Hyundai supplier in recent years, according to interviews with a dozen former and current plant employees and workers.

Several of those minors, they said, gave up schooling to work long shifts at the factory, a sprawling facility with a documented history of health and safety injuries, including amputation hazards.

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

The revelation 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 a “Human Rights Policy” posted online, Hyundai says it prohibits child labor throughout its workforce, including suppliers.

The company recently said it would be expanding into the United States and plans to invest over $5 billion, including a new electric vehicle factory near Savannah, Georgia.

“Consumers should be outraged,” said David Michaels, the former US Assistant Secretary of Labor for the Occupational Safety and Health Administration (OSHA), with whom Reuters shared the findings of its reporting.

“You should know that these cars are being built, at least in part, by workers who are children and have to go to school, rather than risking life and limb because their families are desperate for income,” he added.

At a time of labor shortages and supply chain disruptions in the US, labor experts told Reuters there was an increased risk that children, particularly undocumented migrants, could end up in jobs that are dangerous and illegal for minors.

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

“FAR TOO YOUNG”

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

Michaels, who is now a professor at George Washington University, said safety at Hyundai suppliers in the US was a recurring concern of OSHA during his eight-year tenure at the agency until his retirement in 2017. Michaels visited Korea in 2015 and said he warned Hyundai executives that heavy demand for “just-in-time” parts was causing safety vulnerabilities.

The SMART plant builds parts for the popular Elantra, Sonata and Santa Fe models, vehicles that accounted for nearly 37% of Hyundai’s U.S. sales through June, according to the automaker. The factory has received repeated OSHA penalties for health and safety violations, federal records show.

A review of the records by Reuters shows that SMART has faced OSHA penalties of at least $48,515 since 2013 and was last fined this year. OSHA inspections at SMART have documented violations, including crush and amputation hazards at the facility.

The plant, whose website says it has the capacity to supply parts for up to 400,000 vehicles a year, has also struggled to retain workers 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. Written by SMART general manager Gary Sport and verified by Reuters, the letter said the plant is “severely short on labor” and that Hyundai “will not tolerate such shortages.”

SMART did not respond to Reuters questions about the letter.

Earlier this year, attorneys filed a class-action lawsuit against SMART and several staffing 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 employees hired as engineers were instead ordered to do menial jobs.

SMART in court documents called allegations in the lawsuit “baseless” and “unfounded.”

Many of the minors at the plant were hired through recruitment agencies, according to current and former SMART employees and local recruiters.

Although staffing agencies help fill industry jobs nationwide, they have often been criticized by labor advocates for allowing large employers to outsource the responsibility for assessing workers’ fitness for work.

A former SMART worker, an adult migrant who left last year for another job in the auto industry, said there were about 50 underage workers between the different factory shifts, adding that he knew some of them personally. Another former adult worker at SMART, a US citizen who also left the plant 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 until 2019. Moultry said the plant has high turnover and is increasingly dependent on migrant workers to keep up with high production demands. She said she remembered working with a migrant girl who “looked like 11 or 12 years old”.

The girl would come to work with her mother, Moultry said. When Moultry asked her real age, the girl said she was 13. “She was way too young to work at this plant or any plant,” Moultry said. Moultry did not provide any further details about the girl and Reuters could not independently confirm her account.

Tzi, the missing girl’s father, contacted Enterprise police on February 3 after failing to return home. Police issued a yellow alert, a public warning when law enforcement believes a child is in danger.

They also launched a manhunt for Alvaro Cucul, 21, another Guatemalan migrant and SMART worker around the time, who Tzi believed might be. Using cell phone geolocation data, police located Cucul and the girl in a parking lot in Athens, Georgia.

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

After the disappearance garnered local coverage, SMART fired a number of underage workers, according to two former employees and other local residents familiar with the plant. The sources said the police attention has raised fears that authorities may soon crack down on other child workers.

Tzi, the father, used to work at SMART and now does odd jobs in construction and forestry. He told Reuters he regretted his children went to work. The family needed whatever income they could get at the time, he added, but is now trying to move on.

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

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Editing by Paulo Prad