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UAW wants US to ban loans and grants to Hyundai for labor issues

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Oct 21 (Reuters) – The United Auto Workers (UAW) union on Friday called on the Biden administration not to provide any grants, loans or other taxpayer support until Hyundai Motor (005380.KS) agrees to solve problems in the workplace.

On Wednesday, Hyundai’s global chief operating officer, Jose Munoz, told Reuters that Korea’s biggest automaker was investigating child labor violations in its U.S. supply chain and planned to “sever ties” with Hyundai suppliers in Alabama who relied on underage workers.

A Reuters investigative report in July documented children, including a 12-year-old, working at a Hyundai-controlled metal stamping plant in rural Luverne, Alabama called SMART Alabama, LLC.

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The UAW said Friday that Hyundai’s decisions to sever ties with some suppliers “will likely result in job losses for hundreds of workers, with nothing done to address what appears to be a systemic problem.” The union called on Hyundai to “improve working conditions for American workers who make Hyundai vehicles.”

Hyundai said it “does not condone illegal employment practices at any Hyundai entity. Our investigation is ongoing and we are working with the authorities in their investigation of this matter.”

The White House did not immediately comment.

Hyundai Motor Group plans to inaugurate its $5.5 billion electric vehicle (EV) and battery manufacturing facility in Georgia on Tuesday — and Biden administration officials are expected to attend.

The automaker is expected to begin commercial production in the first half of 2025 with an annual capacity of 300,000 EV units.

Hyundai is lobbying the Biden administration to revise a law approved in August that immediately barred electric vehicles outside North America from receiving $7,500 consumption tax credits. This made all Hyundai electric vehicles currently on sale in the United States ineligible.

The law provides tens of billions of dollars in new loan, tax credit and grant programs for automakers to build cleaner vehicles.

The UAW has previously argued with Hyundai and unsuccessfully sought to organize workers at its Alabama plant and other foreign auto plants.

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Reporting by David Shepardson; Editing by Aurora Ellis

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