ibusinesslines.com March 20, 2018

GM Ceases Operation in Venezuela as Plant is Seized

20 April 2017, 05:50 | Kelvin Horton

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Officials with GM called the takeover an "illegal judicial seizure of its assets".

The automaker said the seizure showed a "total disregard" of its legal rights. The company said it has been forced to lay off its 2,700 Venezuelan workers.

GM said its Venezuela plant has been "unexpectedly taken by the public authorities", it's based in the city of Valencia.

GM has about 2,700 workers in the troubled country, where it's been the market leader for over 35 years.

GM, which has 79 auto dealerships in Venezuela, also promised it would make "separation payments" to Venezolana employees following the reported seizure.

Venezuelan authorities did not immediately respond to a request for comment.

Maduro and his predecessor, the late Hugo Chavez, have seized the assets of foreign companies on several occasions, including a "temporary" takeover of two plants owned by US company Clorox in 2014.

President Nicolas Maduro, handpicked by Chavez as his successor, has continued the tradition. The country is in the midst of a years-long brutal economic depression, their currency is almost worthless, unemployment is said to be as high as 25 percent, and violent protests have broken out as a result of these things.

Hyperinflation has wiped out the value of its currency, the bolivar. At least four people have been killed in the protests.

Oil-rich Venezuela has seen its economy crash under the socialist rule of the Maduro regime. The Supreme Court also blocked all reforms from opposition lawmakers.

Companies have been cutting operations in Venezuela as a result of runaway inflation and strict currency controls.

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.

Coca-Cola was forced to halt production of Coke and other sugar-sweetened beverages previous year due to a sugar shortage.

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