Hyundai To Dump Alabama Subsidiary Over Child Labor

South Korean automaker Hyundai Motor Co. said it would divest its controlling stake in an Alabama auto parts plant where Reuters last year documented children as young as 12 were working, Joshua Schneyer, Kristina Cooke and Mica Rosenberg reported for Reuters.

Photo Insert: Hyundai also told investors it was implementing extensive new corporate measures in collaboration with the US Department of Labor (DOL) to prevent future child labor violations.

In a letter to shareholders from Hyundai Chief Executive Jaehoon Chang, the company said recent audits at 29 of its direct suppliers across Alabama made it confident they are "now in full compliance with underage labor laws."

The audits began last August, after Reuters first reported on the issue, and were conducted by an outside law firm that reviewed documents and did on-site inspections. Hyundai provided a copy of the letter to Reuters.

Hyundai also told investors it was implementing extensive new corporate measures, including a training program for its parts suppliers to begin next month in collaboration with the US Department of Labor (DOL), to prevent future child labor violations.

Hyundai's pledge to its shareholders comes after a 2022 Reuters investigation showed several suppliers to the automaker's massive Montgomery, Alabama vehicle plant used underage migrant workers to make parts for its popular US-made cars and SUVs.

One of the plants where children worked, SMART Alabama LLC in rural Luverne, Alabama, is a direct Hyundai subsidiary. According to Hyundai's financial statements from last year, the automaker controls a 72% stake in SMART.

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