US Reviewing Venezuela’s Seizure of GM Assets
U.S. officials are reviewing Venezuela’s seizure of General Motors’ assets in the country, U.S. State Department spokesman Mark Toner said Thursday.
“We are reviewing the details of the case,” Toner said in a statement, saying the United States hoped to resolve the matter “rapidly and transparently.”
GM said Wednesday that Venezuelan authorities had taken over its plant in the industrial hub of Valencia, adding that it was halting operations and laying off 2,700 workers due to the “illegal judicial seizure of its assets.”
The largest U.S. automaker vowed to “take all legal actions” to defend its rights. The seizure comes amid a deepening economic crisis in leftist-led Venezuela that has already roiled many U.S. companies.
The seizure is the result of a civil dispute with a Venezuelan concessionaire dating back to 2000 and does not represent a nationalization as such, according to local media reports.
GM, the market leader in Venezuela for 35 years, said in a statement that in addition to the plant seizure “other assets of the company, such as vehicles, have been illegally taken from its facilities.”
Total auto production in Venezuela fell to a historic low of 2,849 cars in 2016, nearly 75 percent less than the year before, according to Venezuela’s automotive industry group.
In the first two months of 2017, GM has not produced any vehicles, while total Venezuelan auto production was just 240 vehicles, down 50 percent over the same period last year. The New York Times reported the GM plant had been closed for the last six weeks as a result of a takeover by members of one of its unions.
Nearly all vehicles built in Venezuela in the first two months this year were assembled by Toyota Motor Corp, which said Thursday that its plant was operating normally.
But a spokesman added the automaker was “only producing based on orders that come in.”
Venezuela’s car industry has been hit by a lack of raw materials stemming from complex currency controls.
In early 2015, Ford Motor Co wrote off its investment in Venezuela when it took an $800 million pre-tax writedown. The company said Thursday it was not producing vehicles in Venezuela.
The South American nation’s economic crisis has hurt many other U.S. companies, including food makers and pharmaceutical firms. A growing number are removing their Venezuelan operations from their consolidated accounts.