Apparently, GM (General Motors) is fighting an illegal seizure in Venezuela, as local authorities have taken control of the company’s Valencia-based auto factory. The auto giant plans to “take all legal actions” to correct the upheaval.
But GM isn’t the only US entity enduring problems in the South American country, as left-controlled Venezuela’s currently facing an ever-growing struggle in its economy.
“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,” the auto-maker behemoth disclosed.
The company went further to say this international incident will be an irreversible detriment to not only GM itself but also to the 2,678 employees, 79 dealerships and parts makers.
Currently, while they were contacted, the Venezuela Information Ministry has yet to weigh in on the matter. More, the country’s auto industry hasn’t seen a positive rise in quite some time—it’s dying. Rudimentary resources aren’t available due to complications in foreign-exchange controls, local production going stalemate and production levels being at an all-time low—if any.
However, back in 2015, Ford Motor Co. seemingly safeguarded its South American investment via a write off entailing $800-million reduction in value—before taxes.
Other US, Venezuela-based entities are suffering in the thick of the crisis—e.g., food and drug companies. Many are simply closing their Venezuelan hubs.
This isn’t the first time Venezuela officials have seized control of foreign companies. Clorox Co. and Venezuela had a 2014 showdown when the country’s government took “temporary” control over two, Clorox factories. The company ultimately closed those locations.
While it seems US companies are closing shop in Venezuela, there are nearly 20 arbitration cases looming over the country—a result of the late Hugo Chavez’s leadership.