GM halts operations in Venezuela after factory is seized

Adjust Comment Print

General Motors (GM) has said its auto plant in Venezuela has been seized by the government due to political tension in the country. GM called the move an illegal judicial seizure of its assets.

President Nicolas Maduro has continued the tradition, while blaming the United States and its companies for Venezuela's economic and political problems.

GM has had a presence in Venezuela since 1948, according to the company, and employed 2,678 workers at its Valencia factory and another 3,900 people at dozens of dealerships around the country.

GM can seek compensation and damages for its lost plant in several different global venues, said Nigel Blackaby, a lawyer at the Freshfields Bruckhaus Deringer law firm, which has battled Venezuela in several high-profile cases in worldwide courts.

General Motors Company's plant in Venezuela was sized by the country's government yesterday.

Indeed, the opposition launched "the mother of all protests" on Wednesday, accusing Maduro of creating a dictatorship. In 2014, US cleaning product company Clorox had to abandon its Venezuelan operations after country officials "temporarily" took over two of its local plants.

The seizure comes amid a deepening economic crisis in leftist-led Venezuela that has already roiled many US companies.

But while GM says the seizure will hurt its dealers, multiple employees at the plant tell NPR that the takeover was actually orchestrated by GM dealers, with the support of a judge and police officers. The country is in the midst of weeks of bloody protests by its citizens demanding a change of government after years of political turmoil and a severe economic crisis.

VA Tests Partnership With CVS To Reduce Veterans' Wait Times
Senate, eliminates a sunset provision in the VA Choice Program and allows continued care until funds for the program are used. The program was scheduled to expire on August 7 with almost $1 billion left over.

According to ABC, Maduro accused the foreign corporation "of participating in an worldwide plot to damage Venezuela's economy", and said the government would step in to provide funds to compensate for lost salaries.

While this was reversed three days later, protests had already erupted.

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

"They came here with all the files and documents saying that they have been fighting this since 2000, saying that General Motors has not been fulfilling its contracts", Perdomo said.

The Venezuelan government had said that Kimberly-Clark Corp failed to consult with them before letting go of the workers. GM's local subsidiary did not provide many details on the plant seizure, however, they have stated authorities are preventing the facility from operating.

Maduro has been accused by the opposition of behaving like a dictator.

Later Thursday, Maduro said he had called for an investigation into cellphone operator Movistar for allegedly being part of the "coup-minded march" organized by adversaries of his government. It was unclear how many people remained in custody on Thursday.