Daily Management Review

General Motors winds up production in Venezuela


04/20/2017


Management of General Motors claims that the Venezuelan authorities have illegally seized the company's plant. In this regard, the concern is immediately suspending its activities in the country.



Michael Kumm
Michael Kumm
"GMV (General Motors Venezolana) unexpectedly passed under the control of the state, which became a hindrance to normal operations. In addition, the company's property, such as cars, has illegally been exported from its territory", the automotive concern said. This is a significant damage for GM and for the workers as the production employs 2.6 thousand people. 79 dealers and suppliers have suffered as well.

GM has already stated that they will pay benefits to laid-off employees in accordance with the laws of Venezuela. Also, the carmaker intends to continue to deliver services in the country and provide its customers in the Venezuelan market with spare parts.

The division of General Motors Venezolana (GMV) was established in 1948. It employs almost 2,7 thousand people, the number of car dealers in the country is about 80 with a staff of about 3.9 thousand people… GMV resolutely rejects the arbitrary actions taken by the authorities and will resolutely take all legal measures within and outside Venezuela to protect their rights," the automaker’s statement said. 

As Bloomberg points out, Venezuela has already seized other enterprises before. So, in 2014, it was announced about the temporary establishment of external control over the factories of cleaning products manufacturer Clorox Co. After that, the company left the country.

Earlier on Thursday, it was reported that at least three people were killed by bullet wounds during a mass demonstration in Venezuela against President Nicolas Maduro. Thus, the list of victims of opposition protests in April rose to eight people. The demonstrators are seeking full restoration of the rights of the Venezuelan parliament, the majority of whose members are representatives of the opposition. They are demanding to set a timetable for the election of new President, as well as the beginning of the process of economic rehabilitation of Venezuela.

The Venezuelan opposition accuses current President of dictatorship, in particular, in ignoring laws, imprisoning political opponents and putting pressure on the judiciary. The opposition also blames Maduro for the economic problems of the country rich in oil.

The Venezuelan economy declined by 10% last year. Inflation may exceed 1600% this year. By the way, at the beginning of this year the country’s authorities stopped publishing official data on consumer prices and the money supply. Unexpectedly, the money supply indicator just stopped appearing on the central bank's website on February 24. 

source: bloomberg.com






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