In troubled Venezuela, a General Motors plant is seized as protesters clash in the streets

In troubled Venezuela, a General Motors plant is seized as protesters clash in the streets source: latimes.com
Venezuela's economy is spiraling out of control.
Published: Thu, 2017-04-20 16:39 119 likes - 57 shares - 35 comments
source: http://www.latimes.com/business/autos/la-fi-hy-gm-venezuela-20170420-story.html

General Motors has shut down operations in Venezuela after it says authorities illegally seized its plant there, fueling growing concerns about the ability of international companies to do business amid the country’s deepening political and economic crisis.

In a statement released by GM on Thursday, the company said its plant had been “unexpectedly taken by the public authorities, preventing normal operation.” The company said other assets, including vehicles, had also been removed from its facilities, and vowed to “vigorously take all legal actions” to defend its rights.

Venezuelan officials did not respond immediately to requests for comment. News of the seizure was not widely covered in the Venezuelan press. But a local newspaper in Valencia, the industrial hub where the GM plant is located, said the authorities began their seizure of the plant on Tuesday and may also have frozen GM’s Venezuelan bank accounts.

The car manufacturer is the latest multinational company to report major problems in Venezuela, which has been devastated by food scarcities, massive inflation and weeks of bloody street protests against President Nicolas Maduro and his leftist government.

Pepsi, Coca-Cola and other companies have suffered major losses as Venezuela’s currency has plummeted — inflation reached an annual rate of 455% in February — and airlines including United and Delta have seen their profits frozen by Venezuelan authorities. McDonald's was forced to suspend sales of Big Macs in the country because of food shortages.

GM has had a presence in Venezuela since 1948, according to the company, and employed 2,678 workers at its Valencia factory and another 3,900 people at dozens of dealerships around the country. The company said this week’s seizure of its property caused it “irreparable damage,” making operations in Venezuela impossible for now. The company said it would pay separation benefits to laid-off workers according to Venezuelan law.

The company’s departure is another sign of instability in Venezuela, where yesterday tens of thousands of protesters took to the streets holding signs that read “Maduro out” and “Down with dictatorship.” At least two people died as the government used armed forces and tear gas to control the crowds, including one teenager who appeared to have died from a bullet fired by a pro-government militia.

Venezuela has been swept by protests since April 4, when the Supreme Court announced it had stripped Congress of its powers. The domestic and international outcry was so intense that those powers were quickly reinstated. The opposition has vowed to continue its demonstrations Thursday.

So far this month, clashes associated with the protests have resulted in seven deaths, more than 200 injured and 538 arrests.

kate.linthicum@latimes.com

Twitter: @katelinthicum

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