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Hyundai is Investigating Possible Case of Child Labor Violations Across its U.S Supply Chain

Industry: Vehicle Manufacturing
Current: Company Performance

Hyundai intends to sever ties with two Alabama-based supplier plants that are under investigation for using child labor
The company is investigating its entire U.S. based supplier network for the potential case of child labor
Hyundai plans to do direct hiring instead of relying on third-party labor suppliers for its operations

Hyundai Intends to Reduce Reliance on Third-Party Labor Contractors

Hyundai is planning to stop depending on third parties for labor supply, and initiate direct hiring of workers for its operations, after discovering the involvement of underaged workers in its supply chain. The company’s supply unit “SMART Alabama” which also supplies auto parts to Kia, is under scrutiny by Alabama's state Department of Labor, in coordination with federal agencies.

Hyundai is facing severe reputational damage due to governmental intervention and is taking all possible steps to maintain its goodwill and ensure the non-occurrence of such cases in the future.

Stringent Actions by Regulatory Authorities for Child Labor Law Violations

A growing number of cases have been reported, involving child labor in manufacturing facilities. Many of the auto manufacturers have been fined for violating child labor laws in past, including Volkswagen, BMW, and Audi among others.

United States Department of Labor is taking stringent actions against companies in child labor law cases. Furthermore, the U.S. District Court ordered SMART Alabama LLC not to ship any of the manufactured parts which were produced within 30 days of a child labor violation. Additionally, according to the authorities, "employers should be aware of employees working at their facilities and should ensure that the employed labors are within the legal working age."

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