GM's Venezuela Plant Illegally Seized by Authorities, Automaker Says

General Motors says Venezuela illegally seizes auto plant

The automaker has called the action an illegal judicial seizure of its assets.

GM's Venezuelan subsidiary, General Motors Venezolana, has operated in the country for almost 70 years and employs almost 2,700 workers there.

GM said it would make "separation payments" to its workers. Maduro claims his opponents are colluding with USA authorities to overthrow him. The American vehicle company said authorities took over the factory on Wednesday and started taking cars from it. The country's Supreme Court recently attempted to strip the opposition-controlled parliament of its powers, sending hundreds of thousands of protesters into the streets of Caracas and other major cities. The crisis has affected many US companies who have previously chose to set up shop there-including Ford, which wrote off all Venezuelan investments in early 2015, taking a $800 million loss. Venezuela is now fighting claims of illegal asset seizures at a World Bank-sponsored arbitration panel from more than 25 companies. Kimberly-Clark and Exxon Mobil are among the other US companies that have pulled out of the South American country as economic conditions there deteriorate. There was no immediate reaction from Washington or Venezuela's government.

GM announced the plant confiscation Thursday, saying its plant in Valencia "was unexpectedly taken by the public authorities, preventing normal operations".

Venezuelan officials did not respond immediately to requests for comment.

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.

The State Department said Thursday it was reviewing details of the GM case but called on authorities to act swiftly and transparently to resolve the dispute.

GM follows foreign manufacturers from Clorox Co.to Kimberly-Clark Corp. who in recent years have halted production and walked away from their Venezuelan plants, after a government intervention.

Company managers in Venezuela said they haven't been able to obtain hard currency to import parts through the country's labyrinthine currency controls for years.

According to ABC, Maduro accused the foreign corporation "of participating in an global plot to damage Venezuela's economy", and said the government would step in to provide funds to compensate for lost salaries. The government last year abruptly postponed regional elections the opposition was heavily favored to win and cut off a petition drive to force a referendum seeking Maduro's removal before elections late next year. It was unclear how many people remained in custody.

Related News: