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GM quits Venezuela after govt seizes factory

AP  |  Valencia (Venezuela) 

announced today that it was shuttering operations in Venezuela after authorities seized its only factory, a dramatic escalation of the chaos engulfing the South American nation amid days of deadly protests.

The plant in the central city of Valencia was confiscated yesterday as anti-protesters clashed with pro- groups in a country battered by economic troubles including food shortages and triple-digit inflation. GM called the move an illegal judicial seizure of its assets.

The Detroit automaker said in a statement today that other assets such as vehicles were taken from the plant, causing irreparable damage to the company.

GM has about 2,700 workers in the country, where it's been the market leader for over 35 years. It also has 79 dealers that employ 3,900 people, and its parts suppliers make up more than half of Venezuela's auto parts market, the company said.

General Motors' announcement comes as Venezuela's opposition looks to keep up pressure on President Nicolas Maduro, taking to the streets again Thursday after three people were killed and hundreds arrested in the biggest anti- demonstrations in years.

It's not the first time the Venezuelan government has seized a foreign corporation's facilities. In July of last year, the government said it would take a factory belonging to Kimberly-Clark Corp. After the American personal care giant said it was no longer possible to manufacture due to a lack of materials.

But the move against GM, the United States' biggest automaker and one of its most recognisable brands, was a much more powerful statement, and could lead to a further erosion of relations between the two countries. There was no immediate reaction from Washington.

The seizure came as tens of thousands of protesters demanded elections and denounced what they consider to be an increasingly dictatorial government. They were met yesterday by a curtain of tear gas and rubber bullets as they attempted to march to downtown Caracas.

Across the country, the clashes have been intense. Pro- government militias, some of whose members were armed, were blamed for two deaths, including that of a teenager in Caracas who was heading to a soccer game with friends.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, April 20 2017. 23:07 IST