Hyundai investors demand changes amid Alabama child labor claims
SOC Investment Group, which works with funds that hold an estimated 27,000 shares in Hyundai, said it will deliver a letter Thursday morning to the South Korean auto manufacturer demanding a new approach to oversight amid allegations of child labor in Hyundai's Alabama supply chain.
SOC IG said the letter would be delivered to Hyundai Motor Group Board Chair Euisun Chung. A draft of the letter obtained by the Montgomery Advertiser calls for a set of specific changes, including:
Commission an independent third-party review of the alignment between Hyundai’s human and labor rights commitments and existing practices in its supply chain and operations
Commit to ongoing third-party monitoring of Hyundai Motor Company’s U.S. supply chain.
Appoint a human rights expert to the board of directors
Commit to ensuring continuity of employment of workers in Hyundai’s U.S. supply chain, bothfor direct and contract workers, so that those workers who have helped uncover unlawfulpractices do not suffer as a result
The investor group sent a letter Oct. 18 and another Nov. 3 calling for similar changes in the face of what it called "significant reputational risks stemming from its association with human and labor rights violations." A draft version of the letter to be delivered Thursday said the response SOC IG received from the company raised questions about "inconsistencies" with recent media reports.
"These latest reports weaken our confidence in Hyundai’s Human Rights oversight system and ongoing assessments," the letter states.
A Hyundai Motor North America spokesman said Wednesday that the company launched an investigation and broader review of its U.S. supplier network after learning of the alleged violations, and that changes were already underway.
"At our request, SL Alabama’s upper management team has been replaced, and both SL Alabama and SMART have terminated their relationships with the third-party staffing agencies who certified that they had screened and cleared individuals as being of legal age," Public Relations and Communications Director Michael Stewart said in a statement.
"As part of our ongoing review, we are requiring our Alabama suppliers to conduct independently verified audits of their operations and to implement any recommended actions. We anticipate that this intervention will enable them to better identify and address any issues while they continue to provide jobs that support local communities."
Reuters reported in July that supplier SMART Alabama had employed underage workers as young as 12 years old at its metal stamping and welding plant in Luverne. A month later, the U.S. Department of Labor sued SL Alabama, a subsidiary of the South Korean SL Corp, for violating labor laws since November 2021 by employing children under the age of 16 at its Alexander City factory. Reuters also reported that migrant children were being employed by suppliers through recruiting or staffing firms.
A December report by Reuters found that children had worked at four or more Hyundai and Kia suppliers in Alabama in recent years.
Hyundai Motor America has posted new monthly retail sales records for the past five consecutive months. Its Montgomery plant builds some of its most popular vehicles, including Elantra sedans, Santa Fe and Tucson SUVs, and Santa Cruz Sport.
Hyundai announced earlier last year that it planned to pour $300 million into its Montgomery plant to start EV production here, including an all-electric Genesis GV70 and a hybrid electric Santa Fe. That triggered a wave of new investment here, including the announcement that supplier giant Hyundai Mobis would build a $205 million plant in Montgomery to feed the electric vehicle production process.
Evan Mealins contributed to this report. Brad Harper covers business and local government for the Montgomery Advertiser. Contact him at firstname.lastname@example.org.
This article originally appeared on Montgomery Advertiser: Hyundai investors demand changes amid Alabama child labor claims