Exclusive: Hyundai subsidiary has used child labor at Alabama factory

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

Underage workers, in some cases as young as 1[ads1]2, have recently worked at a metal stamping plant operated by SMART Alabama LLC, these people said. SMART, listed by Hyundai in corporate filings as a majority-owned entity, supplies parts for some of the most popular cars and SUVs built by the Montgomery-based automaker, its U.S. flagship.

In a statement on Friday, Hyundai (005380.KS) said it “does not tolerate illegal employment practices at any Hyundai unit. We have policies and procedures in place that require compliance with all local, state and federal laws.” It did not respond to detailed questions from Reuters about findings for this story.

SMART, in a separate statement, said it follows federal, state and local laws and “rejects any allegation that it knowingly employed anyone who is ineligible for employment.” The company said it relies on temp agencies to fill jobs and expects “those agencies to follow the law in recruiting, hiring and placing workers on their premises.”

SMART did not respond to specific questions about the workers quoted in this story or on-the-job scenes they and other people familiar with the factory described.

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

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

Police in the Tzi family’s adopted hometown of Enterprise also told Reuters that the girl and her siblings had worked at SMART. The police, who helped find the missing girl, identified her during a search in a public notice.

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

The police force in Enterprise, about 45 miles from the Luverne facility, does not have jurisdiction to investigate possible violations of labor laws at the plant. Instead, the force notified the state attorney general’s office after the incident, James Sanders, an Enterprise police detective, told Reuters.

Mike Lewis, a spokesman for the Alabama attorney general’s office, declined to comment. It is unclear whether the office or other investigators have contacted SMART or Hyundai about possible violations.

Pedro Tzi’s children, who have now enrolled for the upcoming school term, were among a larger group of underage workers who got jobs at the Hyundai-owned supplier in recent years, according to interviews with a dozen former and current factory employees and labor. recruiters.

Several of those minors, they said, have skipped school to work long shifts at the facility, a sprawling facility with a documented history of health and safety violations, including amputation hazards.

Most of the 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, what the minors were paid or other terms of their employment.

The revelation of child labor in Hyundai’s US supply chain could trigger consumer, regulatory and reputational backlash for one of the most powerful and profitable carmakers in the world. In a “human rights policy” posted online, Hyundai says it prohibits child labor in its entire workforce, including suppliers.

The company recently said it will expand in the United States, planning more than $5 billion in investments including a new electric car 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, or OSHA, with whom Reuters shared the findings of its reports.

“They should know that these cars are built, at least in part, by workers who are children and need to go to school instead of risking life and limb because their families are desperate for income,” he added.

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

In Enterprise, home to a bustling poultry industry, Reuters told earlier this year how a Guatemalan minor, who migrated to the United States alone, found work at a local chicken processing plant read more .

“EVERYTHING FOR THE YOUNG”

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

Michaels, now a professor at George Washington University, said the safety of U.S.-based Hyundai suppliers was a recurring concern at OSHA during his eight years as head of the agency until he left in 2017. Michaels visited Korea in 2015, and said he warned Hyundai executives that the high demand for “just-in-time” parts was causing safety breaches.

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 plant has received repeated OSHA penalties for health and safety violations, federal records show.

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

The factory, whose website says it has the capacity to supply parts for up to 400,000 vehicles each year, has also had trouble retaining labor to keep up with Hyundai’s demand.

In late 2020, SMART wrote a letter to US consular officials in Mexico seeking a visa for a Mexican worker. The letter, written by SMART’s general manager Gary Sport and reviewed by Reuters, said the plant was “severely understaffed” and that Hyundai “will not tolerate such shortages.”

SMART did not respond to Reuters’ questions about the letter.

Earlier this year, lawyers filed a class-action lawsuit against SMART and several staffing firms that help supply 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 ordered to work menial jobs instead.

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

Many of the minors at the facility were hired through recruiting agencies, according to current and former SMART workers and local labor recruiters.

Although staffing firms help fill industrial jobs across the country, they have often been criticized by labor advocates for enabling large employers to outsource the responsibility of checking workers’ qualifications to work.

A former worker at SMART, an adult migrant who left for another job in the auto industry last year, said there were about 50 underage workers between the various plant shifts, adding that he knew some of them personally. Another former adult worker at SMART, a US citizen who also left the factory last year, said she worked alongside about a dozen minors on the shift.

Another former employee, Tabatha Moultry, 39, worked on SMART’s assembly line for several years through 2019. Moultry said the facility had high turnover and increasingly relied on migrant workers to keep up with intense 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 in that plant, or any plant,” Moultry said. Moultry did not provide further details about the girl, and Reuters could not independently verify her account.

Tzi, the father of the missing girl, contacted Enterprise police on February 3, after she did not return home. The police issued a yellow alert, a public advisory when the police believe a child is in danger.

They also started a hunt for Alvaro Cucul (21), another Guatemalan migrant and SMART worker around the time with whom Tzi thought she might be dating. Using cellphone geolocation data, police found Cucul and the girl in a parking lot in Athens, Georgia.

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

After the disappearance generated local news coverage, SMART fired a number of underage workers, according to two former employees and other locals familiar with the facility. The sources said the police attention raised fears that the authorities could soon crack down on other minor workers.

Tzi, the father, also once worked for SMART and now does odd jobs in the construction and forestry industry. He told Reuters that he regrets that his children had gone to work. The family needed any income they could get at the time, he added, but are now trying to move on.

“All that is over now,” he said. “The children are not working and in the autumn they are going to school.”

Editing by Paulo Prada

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