General Motor’s factories in Venezuela have been seized by the government.
Crisis laden leftist-ruled Venezuela has seized a plant belonging to General Motors. The American company stated that Venezuelan authorities had illegally seized its plant in the industrial hub of Valencia and has vowed to “take all legal actions” to defend its rights.
This is not the first such incident in Venezuela as the its government in the past has roiled many a U.S. company.
“Yesterday, GMV’s (General Motors Venezolana) plant was unexpectedly taken by the public authorities, preventing normal operations. In addition, other assets of the company, such as vehicles, have been illegally taken from its facilities,” said General Motors in a statement.
It added, the seizure would cause irreparable damage to the company, its suppliers, its 79 dealers and to its 2,678 workers.
Venezuela’s Information Ministry did not immediately respond to a request for information.
Hit by a lack of raw materials, Venezuela’s ailing car industry is seeing a freefall. The lack of availability of raw materials stems from a complex matrix of currency controls and stagnant local production as a result many plants are barely in production.
In 2014, the Venezuelan government had announced the “temporary” takeover of two plants belonging to Clorox Co, a U.S. cleaning products manufacturer, which then left the country.
In 2015 Ford Motor Co had to write off investments worth $800 million in Venezuela.
The country’s economy has hurt many U.S. companies, including pharmaceuticals, food manufacturers and automakers. Many American companies are moving their Venezuelan operations out of their consolidated accounts.
Venezuela is currently facing nearly 20 arbitration cases over nationalizations which occurred under late leader Hugo Chavez.