Hyundai Motor Prepares To Divest Stake In Alabama Supplier After Child Labor Investigation

Hyundai Motor Company HYMTF plans to divest its ownership interest in its Alabama supplier, SMART, after child labor investigations.
In a letter to the shareholders, Hyundai Chief Executive Officer Jaehoon Chang said the company is implementing new, more stringent workforce standards throughout its supply chain following an investigation into supplier labor practices.
The investigation was mooted after discovering two Alabama suppliers had each employed an underage worker. The investigation found that Hyundai's U.S. tier 1 suppliers were in full compliance with underage labor laws.
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Two suppliers, SL Alabama and SMART, have terminated their relationships with the third-party staffing agencies that falsely certified that they had screened and cleared underage individuals as being of legal age.
Following thorough investigations with 29 tier-one suppliers, the South Korean auto major is introducing a compliance training program in collaboration with the U.S. Department of Labor for suppliers on various employment subjects.
The training program is expected to begin in March.
Price Action: HYMTF shares closed higher by 2.77% at $35.21 on Thursday.