Exclusive: Hyundai subsidiary used child labor at Alabama factory

LUVERNE, Ala., July 22 (Reuters) – A subsidiary of Hyundai Motor Co used child labor at a plant that supplies parts for the Korean automaker’s assembly line in nearby Montgomery, Ala., 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 plant operated by SMART Alabama LLC, these people said. SMART, listed by Hyundai in corporate filings as a majority-owned unit, supplies parts for some of the automaker’s most popular cars and SUVs built in Montgomery, its flagship U.S. assembly plant.

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

SMART said in a statement that it follows federal, state and local laws and “denies any allegation that it knowingly hired anyone who was ineligible for employment.” The company said it relies on temporary employment agencies to fill jobs and expects “those agencies to follow the law in recruiting, hiring and placing workers on its premises.”

SMART did not respond to specific questions about the workers cited in this story or work scenes they and others familiar with the factory described.

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

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

Police in the Ji family’s hometown of Enterprise also 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 during the search.

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

Police in Enterprise, about 45 miles from the Luverne plant, do not have jurisdiction to investigate possible labor violations at the factory. Instead, police notified prosecutors after the incident, Enterprise detective James Sanders told Reuters.

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

Pedro Ji’s children, now enrolled for the upcoming school term, were among a larger group of underage workers who found work at the Hyundai-owned supplier in the past few years, according to interviews with a dozen former and current employees at the plant and recruit workers.

Some of those minors, they said, dropped out of school to work long shifts at the plant, 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, how much the minors were paid or other terms of their employment.

The revelation of child labor in Hyundai’s U.S. supply chain could spark a backlash among consumers, regulators and the reputation of one of the world’s most powerful and profitable automakers. In a “human rights policy” posted online, Hyundai says it prohibits child labor in its workforce, including suppliers.

The company recently said it will expand in the United States, planning investments of more than $5 billion, including a new electric vehicle factory near Savannah, Georgia.

“Consumers should be outraged,” said David Michaels, a former US assistant secretary of labor at the Occupational Safety and Health Administration, or OSHA, with whom Reuters shared the findings of its reports.

“They need to know that these cars are made, at least in part, by workers who are children and should be going to school instead of risking their lives and health because their families are in desperate need of income,” he added.

At a time of US labor shortages and supply chain disruptions, labor experts told Reuters there were increased risks of children, especially undocumented migrants, ending up in jobs that are dangerous and illegal for minors.

In Enterprise, home to a thriving poultry industry, Reuters earlier this year described how a Guatemalan minor who had migrated to the United States on his own found work at a local chicken processing plant Read more.

“TOO YOUNG”

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

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

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

A Reuters review of 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 factory.

The plant, which its website says has the capacity to supply parts for up to 400,000 cars each year, has also had difficulty 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 general manager Gary Sport and reviewed by Reuters, said the plant was experiencing “severe labor shortages” and that Hyundai “will not tolerate such deficiencies.”

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

Earlier this year, lawyers filed a class-action lawsuit against SMART and several recruiting firms that help source workers with U.S. visas. The lawsuit, filed in the U.S. 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 do menial work instead.

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

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

Although staffing firms help fill industrial jobs across the country, they are often criticized by labor advocates for allowing large employers to outsource the responsibility of verifying employees’ eligibility to work.

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

Another former employee, Tabatha Moultrie, 39, worked on SMART’s assembly line for several years until 2019. Moultrie said the plant has high turnover and increasingly relies on migrant workers to keep up with intensive production. requirements. She said she remembers working with a migrant girl who “looked 11 or 12 years old”.

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

Qi, the father of the missing girl, contacted Enterprise police on February 3 after she did not return home. Police have issued an Amber Alert, a public advisory, when law enforcement believes a child is in danger.

They also launched a search for Alvaro Kukul, 21, another Guatemalan migrant and SMART worker at the time, with whom Ji believed she might be. Using cellphone geolocation data, police found Kukul and the girl in a parking lot in Athens, Georgia .

The girl told officers that Kukul was a friend and that they had traveled there to look for other job opportunities. Kukul 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 sparked local news 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 raised fears that the authorities may soon crack down on other underage workers.

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

“It’s all over now,” he said. “The kids are out of work and will be in school in the fall.”

Editing by Paulo Prada

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