Following Allegations Of Child Labor, Hyundai Motor Will Divest Its Alabama Subsidiary

After investigating allegations that workers at an auto parts factory in Alabama were under the age of 18, Hyundai Motor Co. said it intends to divest the company's Alabama subsidiary.

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Hyundai's chief executive, Jaehoon Chang, announced Friday that the company plans to sell its majority stake in SMART Alabama LLC, which is a majority-owned subsidiary of Hyundai. Reuters reported last year that a plant in Luverne, Ala., employed child labor, with some workers under the age of 12.

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

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“Our suppliers are now fully compliant with underage labor laws,” according to an audit conducted by an outside law firm.

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"It is Hyundai's responsibility to make sure all our suppliers understand and meet our high global workforce standards, regardless of the fact that third-party staffing agencies provided false documentation to these suppliers," he said.

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Based on the results of the company's investigation, it was discovered that its U.S. tier-one suppliers were fully compliant with all applicable laws regarding underage labor. The company said it is implementing a new, more stringent workforce standard through the entire supply chain of its products.

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