GM halts Venezuela operations after government seizes factory

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GM halts Venezuela operations after government seizes factory

Sao Paulo (AFP) – General Motors has shut down its Venezuelan operation and laid off 2,678 people after the crisis-struck Latin American country nationalized the plant and seized cars, the company says.

On Wednesday, the factory was “unexpectedly seized by the Venezuelan authorities, preventing normal operations,” GM’s spokesperson in Brazil, Julia Bastos, said Thursday in an email. 

“In addition to this, other activities of the company, such as cars, were illegally removed,” she said.

The US auto-maker’s plant has capacity for building 100,000 cars a year, but had already ground to a standstill because of the collapse in oil-rich Venezuela’s economy and lack of access to US dollars.

GM has been in Venezuela for 69 years. In addition to its directly employed staff, there were 79 dealerships in the country, with some 3,900 workers. 

Compensation will be paid to the laid off workers “very soon,” Bastos said.

GM said that the takeover was made through a court order and that as of Thursday, the government had not responded to GM’s decision to halt operations.

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 Wednesday.

Venezuelan opposition demonstrators seeking the resignation of leftist President Nicolas Maduro vowed to hold a second day of huge protests in the capital Caracas on Thursday. As many as eight people are believed to have been killed in clashes this month.

The international community has widely condemned Maduro for attempting to tighten his grip on power and shut out the opposition.

US auto-maker General Motors has operated in Venezuela for 69 years
Copyright GETTY IMAGES NORTH AMERICA/AFP/File BILL PUGLIANO
Demonstrators clash with the police during a rally against Venezuelan President Nicolas Maduro, in Caracas on April 19, 2017
Copyright AFP JUAN BARRETO

 

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