Published: Fri, April 21, 2017
Tech | By Dwayne Harmon

GM halts operations in Venezuela after factory is seized

GM halts operations in Venezuela after factory is seized

One of the plants of General Motors has been seized by local authorities due to whom they had to stop operating in Venezuela on Wednesday.

"[GM] strongly rejects the arbitrary measures taken by the authorities and will vigorously take all legal actions, within and outside of Venezuela, to defend its rights", it said in a statement. It employs almost 2,700 workers and has 79 dealers in the country.

El Universal reported the seizure is likely related to a lawsuit against the company filed by a former landowner in Maracaibo.

The Venezuelan government has had no comment about the GM factory. The crisis has affected many USA companies who have previously made a decision to set up shop there-including Ford, which wrote off all Venezuelan investments in early 2015, taking a $800 million loss. GM said it was notified this week that a low-level court ordered an embargo of its plant, bank accounts and other assets in the country.

President Nicolas Maduro has continued the tradition, while blaming the United States and its companies for Venezuela's economic and political problems. 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. GM's factory in the industrial city of Valencia did not produce a single vehicle previous year. Nationwide, auto makers assembled just 2,849 cars a year ago, from a peak of 172,218 vehicles in 2007.

"We are concerned that the government of Maduro is violating its own constitution and is not allowing the opposition to have their voices heard, nor allowing them to organize in ways that expresses the views of the Venezuelan people", Secretary of State Rex Tillerson told reporters Wednesday.

GM is the market leader in Venezuela.

GM will continue to provide aftermarket service and parts for its customers through its dealers, it added.

Despite Venezuela's grim outlook, many vehicle makers have chose to stay put and avoid the drastic step of shutting down operations to avoid losing market share in case the economy dramatically improves or a more business-friendly government takes power.

General Motors has stopped operations in Venezuela after its only plant there was illegally seized by authorities, the automaker says in a statement.

Venezuelan Interior Minister Nestor Reverol is blaming an opposition party for the killing of a 23-year-old woman amid ongoing protests in the South American country.

Like this: