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US:Slave labor scandal touches carmakers

Slave labor scandal touches carmakers

Brazilian supplier of charcoal being probed

David Shepardson / Detroit News Washington Bureau

WASHINGTON -- Ford Motor Co. said Thursday that it stopped buying pig iron from an Illinois company after a news organization found that a Brazilian supplier of charcoal needed to make the raw iron used slave labor.

In addition, General Motors Corp., DaimlerChrysler AG's Chrysler Group, Toyota Motor Corp. and other automakers and suppliers are re-examining their supply chain in the wake of the findings, which were outlined Thursday in a 6,800-word Bloomberg News story.

Bloomberg reported that thousands of Brazilians were forced to work in oppressive conditions to produce charcoal used to make pig iron, a basic ingredient of steel.

The pig iron is bought by brokers, then sold to steelmakers and foundries that sell it to companies that make vehicles, sinks, refrigerators and other products.

Despite malaria and a chronic cough, Alexandre Pereira dos Reis, 32, said he works long days shoveling charcoal out of a kiln near the city of Tucurui in the Brazilian Amazon without getting paid.

"This hits you hard," dos Reis told Bloomberg. "I would leave if I could, but I need the work."

Many workers spend their nights in lean-tos they make from plastic sheeting they throw over branches, in places open to rain and snakes, Bloomberg said, drinking unclean water from stagnant pools shared with cattle. Food is scarce, and many die in the poor working conditions.

The amount of pig iron in vehicles that could be linked to slave labor is small -- a fraction of one percent of all supply purchases.

Ford and GM buy $155 billion in global parts. The amount in question is up to $8.2 million in pig iron.

Bloomberg said Ford, appliance maker Whirlpool Corp., and Kohler Co., which makes sinks and bathtubs, used steel traced to the charcoal camp in Brazil that officials say used slaves.

All have purchased pig iron from importer National Material Trading Co., which is supplied by the camp, Bloomberg said. Kohler also said it will investigate.

Illinois-based National Material Trading imports 1.5 million metric tons of pig iron a year from Brazil; one of its suppliers is Cosipar, Brazil's No. 3 pig iron exporter.

Ford spokesman Paul Wood said the automaker purchased less than $5 million annually in pig iron from National Material Trading. The steel was used at its Cleveland Casting facility to make crank shafts. Ford halted purchases from the company on Oct. 5."We wanted to suspend the shipments until we understand exactly what is going on and if, in fact, this material is making its way into our supply chain," Tony Brown, Ford's head of global purchasing, told Bloomberg. "We take this matter very seriously."

Wood said Thursday that the company published a corporate responsibility policy in 2003 that expressly forbids any use of involuntary labor. Its suppliers are also visited by inspectors to ensure workers are properly treated.

National Material Trading also sells pig iron to Intermet Corp., a Texas-based auto parts producer that makes about $3.2 million in components annually for GM. Intermet also provides some parts for Chrysler.

GM spokeswoman Deborah Silverman said GM has resumed buying from Intermet after it conducted a thorough review and demonstrated that it wasn't buying any steel made with slave labor.

But GM said it took the inquiry from Bloomberg seriously, temporarily halting purchases from Intermet, and sent a reminder letter to all suppliers of the importance of ensuring that no slave labor is used in producing materials.

Silverman said Bo Andersson, GM's purchasing chief, was in eastern Europe when Bloomberg contacted the company.

"He dropped everything to personally look into this," she said. "That's how seriously we took this."

Chrysler spokesman Mike Aberlich said the company is reviewing its pig iron purchases, noting that they can be hard to trace because Chrysler is three or four levels down the supply chain.

"It's a very difficult process, but we are taking the steps necessary to ensure that it isn't in the supply chain," Aberlich said.

Bloomberg visited camps in Brazil and talked to workers who made no money. It quoted experts as saying there were 1,000 such camps in Brazil that used involuntary labor and said some were guarded by men with automatic weapons.

Dan Sieger, a Toyota spokesman, said the company is conducting an investigation and doesn't know if any of the pig iron it purchased was the product of involuntary labor. It hasn't changed its buying practices.

"We will not buy from any supplier that engages in human rights violations," Sieger said.

The International Labor Organization -- an arm of the United Nations -- estimates there are 12.3 million people in forced labor worldwide, though other estimates range from 4 million to 27 million, the U.S. State Department says.

The State Department says most slave labor is the product of poor people preyed on by recruiters who find them jobs hundreds of miles away or in another country. When they arrive, they are not paid or are held and forced to work months or years to pay off "fees."

In Brazil, Bloomberg said recruiters dispatched by slave camp owners promise steady-paying jobs. Once at the Amazon camps, some workers are forced -- at times at gunpoint -- to work off debts to their bosses for food and clothing bought at company stores.

My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.

My next Ford.....
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