GM halts operations in Venezuela after factory is seized

Breitbart News20 Apr 20170 20 Apr 2017 20 Apr 2017

General Motors GM.N said on Wednesday that Venezuelan authorities had illegally seized its plant in the industrial hub of Valencia and vowed to "take all legal actions" to defend its rights. Venezuela is now fighting claims of illegal asset seizures at a World Bank-sponsored arbitration panel from more than 25 companies.

In recent years, Bridgestone, General Mills, Procter & Gamble, Ford Motor Co. and other multinational corporations have also scaled back operations in Venezuela.

The three deaths bring to eight the number of people killed since protests began three weeks ago over the Supreme Court's decision to strip the opposition-controlled Congress of its last remaining powers, a move that was later reversed amid a storm of worldwide criticism.

"Yesterday, GMV's (General Motors Venezolana) plant was unexpectedly taken by the public authorities, preventing normal operations".

The Venezuelan government has offered no explanation for its seizure of the GM plant, and the timing of the move suggests Maduro may be looking to escalate his confrontation with the United States to try to move attention away from the intensifying protests against him. The dealership had been seeking damages from GM of 476 million bolivars - about $665 million at the official exchange rate, but $115 million on the black market where many Venezuelans are forced to turn to sell their increasingly worthless currency.

GM says its plant was seized Wednesday in disregard of its right to due process.

GM responded to the employees' statements by saying the company stands by the information in its original release.

The plant takeover happened on the same day that huge crowds of demonstrators marched against Maduro's government, calling for new elections and a return to democratic rule. Like most carmakers in the oil-producing nation, it has seen production grind to a halt as the cash-strapped government chokes off its access to dollars needed to import parts and repatriate profits. Nationwide, auto makers assembled just 2,849 cars in 2016, from a peak of 172,218 in 2007.

GM is the market leader in Venezuela. But it was unclear if the GM seizure was meant as some form of retaliation for the alleged plots. Kimberly-Clark and Exxon Mobil are among the other USA companies that have pulled out of the South American country as economic conditions there deteriorate.

GM said in its annual report filed in February that it was closely monitoring the environment in Venezuela to assess whether changes meant it no longer maintained control of its local subsidiaries. In July of a year ago, the government said it would take a factory belonging to Kimberly-Clark Corp. after the US personal care giant said it was no longer possible to manufacture in the crisis-wracked nation due to a lack of materials.

Venezuelans took to the streets Wednesday for massive demonstrations for and against President Nicolas Maduro, whose push to tighten his grip on power has triggered deadly unrest that has escalated the country's political and economic crisis.