Back in July, Reuters broke the news that SMART Alabama, a Hyundai-owned supplier, had been employing child laborers as young as 12. The next month, the U.S. Department of Labor accused a second supplier, SL Alabama LLC, of also using child labor. Today, Reuters published another report that claims the child labor issue among Hyundai and Kia’s suppliers is even worse than we previously knew.
According to Reuters, at least four suppliers in Alabama have used child labor in recent years. Both state and federal agencies are reportedly investigating as many as six other suppliers for the same thing. Hwashin America Corp is accused of hiring a 14-year-old girl at its Greenville, Alabama plant, and a former Ajin Industrial Co employee told Reuters they worked with at least 10 minors. That claim was backed up by six additional former Ajin employees.
Since the initial report in July, Reuters says as many as 10 suppliers have been investigated for using child labor. But sources say they still don’t know whether or not those investigations will lead to any charges or fines. Ajin has said it “will cooperate fully” with the investigations, and both Ajin and Hwashin claim that “to the best of our knowledge,” they haven’t hired any children.
When asked for a comment, Hyundai told Reuters it “does not condone or tolerate violations of labor law.” Kia, meanwhile, said it “strongly condemns any practice of child labor and does not tolerate any unlawful or unethical workplace practices internally or within our business partners and suppliers.”
After news broke that SMART and SL had been using child labor, Hyundai COO José Muñoz told Reuters that their purchasing department would stop doing business with those suppliers “as soon as possible.” He also pledged to investigate all other suppliers and stop using third-party staffing agencies that its suppliers regularly used to find workers.
That doesn’t appear to still be true, however. Hyundai recently told Reuters that it had changed its mind about doing business with SMART and SL, claiming they’ve taken “corrective actions” and fired the staffing agencies that supplied the child laborers. Hyundai said “additional oversight is a better course at this time than severing ties with these suppliers.”
A previous Reuters report explained in depth how staffing agencies in Alabama actively recruit undocumented immigrants, including children without parents or guardians, to work in chicken processing plants. As with those workers, Reuters found that at least some of the children Hyundai’s suppliers hired used fake identities and documents and that the staffing companies were sometimes involved themselves. Human trafficking authorities are also investigating.
During its investigation, Reuters “interviewed more than 100 current and former factory workers and managers, labor recruiters, state and federal officials, and others. Reporters spent weeks around auto parts factories in rural Alabama and reviewed thousands of pages of court records, corporate documents, police reports and other records.”
According to several current and former employees, the pressure on suppliers to deliver materials without delay or face significant fines became even more intense when the pandemic hit, causing labor and supply shortages. And when there’s a lot of money on the line, a lot of companies are willing to cut corners and break laws to find enough workers. Several labor experts Reuters talked to essentially described the labor violations as inevitable.
“It seems like the stage was set for this to happen,” said Terri Gerstein, director of the state and local enforcement project at Harvard Law School’s Labor and Worklife Program. “Plants in remote, rural areas. A region with low union density. Not enough regulatory enforcement. Use of staffing agencies.”
“When you have workers who are desperate for jobs and they’re not empowered and you have a lot of competition, you often see a race to the bottom,” said Jordan Barab, a former deputy assistant secretary at OSHA.
In August, SL was charged with violating child labor laws that require someone to be at least 16 to work in a factory at all and ban anyone under 18 from working what the Department of Labor describes as a “hazardous occupation,” including “Power-driven metal-forming, punching, and shearing machines.” When the DOL investigated SL, it reportedly found “seven workers between the ages of 13 and 16 on the SL factory floor.”
But the fines SL and the staffing agency faced totaled about $36,000, which is essentially nothing. SL told Reuters it had fired the staffing agency and fired the now-former president of the plant.