GM Plant In Venezuela Seized By Government

DETROIT, MI — General Motors said the government of Venezuela suddenly took control of a car plant there Wednesday, describing the action as “an illegal seizure of its assets,” including cars. The move further illustrated the the deepening economic and political instability in the South American country.

Detroit-based GM, the world’s third-largest automaker, said the seizure in Venezuela’s industrial hub of Valencia shows “total disregard” for its legal rights. 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,” the company said in a statement.

GM has operated its subsidiary, General Motors Venezolana, for more than 70 years, employing 2,700 workers and 79 dealers. The company said the seizure put an end to its Venezuelan operations and that it would make “separation payments” to workers “as far as the authorities permit.”

Further, GM said it is “confident that justice will eventually be served, and looks forward to continue leading the Venezuelan market.”

The crisis in Venezuela has sparked deadly street protests against the government of President Nicolas Maduro, who has blamed the country’s problems on U.S. manufacturers, CNN reported.

GM joins Exxon, Coca-Cola, Clorox Co., Halliburton, Procter & Gamble and other global companies that have either exited entirely or slowed their businesses. It isn’t expected adversely affect GM’s finances because so few cars were sold there, Arndt Ellinghorst, an automotive analyst for Evercore ISI, told the Detroit Free Press.

Other automakers, including Ford Motor Co. and Fiat Chrysler Automobiles, are also struggling in Venezuela, where the car industry is in a freefall due to a lack of raw materials. Ford wrote off its investment in the country in early 2015, taking an $800 million pre-tax writedown, Reuters said.

Tire maker Bridgestone exited Venezuela after selling its assets last May after a six-decade presence, The Detroit News reported.

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