In July, Reuters published an investigative work on child labor at a Hyundai parts supplier called Smart, in Luverne, Alabama. Hyundai is the majority owner of Smart, and both Smart and Hyundai said they were not aware of 12-year-olds working at the facility. One month lateranother Hyundai supplier in Alabama, which is not owned by Hyundai, admitted to employing children. Reuters keep digging on this issue and has just published another lengthy investigation of juvenile workers in the industrial ecosystem of the Hyundai Corporation in Alabama. The news organization said it had found at least four factories in the area that used child labor, and that “federal agencies are investigating whether children worked for about half a dozen other manufacturers in the past year.” supply chains of automakers in the southern state of the United States.”
The report names two more vendors. Hwashin is a wholly owned Hyundai factory in Greenville, AL, while Ajin is a supplier in Cusseta, AL owned by a Korean-based parent company also named Ajin. In early 2021, a local school official reported Hwashin to the county government for possibly hiring 12-year-olds. Reuters interviewed employees who said they worked at Ajin, an adult from Mexico said he spoke to at least 10 workers under the legal age, and a manager at the factory said he had raised concerns but was told by bosses to “focus on production.” Reuters says that as of the August report, “up to 10 factories in Alabama supply parts for Hyundai or that has been investigated by various state and federal law enforcement or regulatory agencies for child labor,” a figure that includes four cases was mentioned.
How is this happening? Partially through staffing agencies who stay in business by filling positions. The report delves into what it calls a “partially interconnected network of suppliers and personnel agencies, many of which are Korean-owned, [that] exists to serve the Hyundai brands.” What it found were the same problems that consistently hindered efforts to find out who did what at the corporate level — the trail of shell companies, the hard-to-find executives, office workers no comment, and a spokesperson with canned responses.However, in this case, Reuters also found connections such as the president of the human resources agency owning a home where underage workers lived and reporting on the personnel agencies that owned the shuttle workers from home to the factory, such workers have the transportation fee deducted from their salary.
Why didn’t the other workers say anything? Because these factories restore local fortunes by playing an “important economic role,” as Hyundai pointed out in a statement to Reutersand no one wants to lose a job that could be the only good job for miles.
Why do these stories keep popping up? Because it’s too profitable to quit the episode. The U.S. Department of Labor and the Alabama Department of Labor fined SL Alabama supplier and a staffing agency approximately $66,000. Meanwhile, another point in Reuters piece notes the pressures of just-in-time production, saying, “To avoid assembly line shutdowns, Hyundai can fine suppliers – sometimes thousands of dollars per minute – for any delay, according to people familiar with the firm’s operations.”
The DOJ has not commented on the status of its investigation, but we probably haven’t heard the last of it. Do it: We certainly haven’t heard this last one.
