Hyundai Motor to Divest Alabama Subsidiary After Child Labor Allegations

By Will Feuer

Hyundai Motor Co. said it plans to divest a subsidiary in Alabama after investigating allegations that the auto parts plant employed underage workers.

Hyundai Chief Executive Jaehoon Chang said Friday in a letter to shareholders that it plans to sell its stake in SMART Alabama LLC, which is majority-owned by Hyundai, while preserving jobs at the plant. Last year, Reuters reported that the unit was said to be using child labor, with some underage workers as young as 12 years old, at a plant in Luverne, Ala.

Mr. Chang said SMART and another supplier, SL Alabama, have "terminated their relationships with the third-party staffing agencies who falsely certified that they had screened and cleared underage individuals as being of legal age."

Audits conducted by an outside law firm "show that our suppliers are now in full compliance with underage labor laws," Mr. Chang said.

"Even though there were issues with third-party staffing agencies that provided false documentation to these suppliers, ultimately, the responsibility is with Hyundai to make sure all our suppliers understand and meet our high global workforce standards," he said.

The company said its investigation found that its U.S. tier-one suppliers were in full compliance with underage labor laws. Hyundai said it is implementing new, more stringent workforce standards throughout its supply chain.

Write to Will Feuer at [e-mail]

(END) Dow Jones Newswires

February 24, 2023 06:53 ET (11:53 GMT)

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