Venezuela says Movistar sent mass messages calling for protests

Nick Mcbride
April 21, 2017

GM called the expropriation of its factory "an illegal judicial seizure of its assets" and announced it would cease operations in the country, where it employs almost 2,700 workers.

The Venezuelan government has previously seized assets belonging to USA companies including those of cleaning products maker Clorox in 2014. In July of a year ago, 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. The Detroit automaker said vehicles and other property were "illegally taken from its facilities" as well.

Government officials fear that the recent violence is a repeat of the April 11 2002 massacre of opposition protesters in the capital by unidentified snipers - which served as a pretext for the short-lived coup against late president Hugo Chavez.

GM says it was an "illegal judicial seizure of its assets".

In March, a World Bank arbitration panel determined that Venezuela did not have to pay $1.4 billion to Exxon Mobil Corp. for confiscating company assets during a wave of nationalizations.

Several dozen employees, in baseball hats and blue shirts adorned with the GM and Cadillac logos, gathered by the plant's main gates in the city of Valencia on Thursday.

The venue depends on what treaties, if any, govern the investment, he said. "We continue to work with the Venezuelan government to seek solutions to convert currency". The move against GM could further strain relations between Venezuela's leftist government and Washington.

Previous year soft-drinks giant Coca-Cola stopped its operations in the country due to shortage in sugar.

"Like most carmakers in the oil-producing nation, it has seen production grind to a halt as the cash-strapped government chokes off its access to dollars needed to import parts and repatriate profits", the wire service writes. Nationwide, auto makers assembled just 2,849 cars past year, from a peak of 172,218 vehicles in 2007. Still, many vehicle makers have stayed put in case the economy experiences a turnaround. The neglected factory hasn't produced a auto since 2015 but GM still has 79 dealers that employ 3,900 people in Venezuela, where for decades it was the market leader. It has about 79 dealers across the country. Venezuelan news reports said the seizure stemmed from a lawsuit that dated from the early 2000s involving a company in the western city of Maracaibo.

"Absent an ability to obtain USA dollars in the near term, which we believe is unlikely, current vehicle production will likely cease in July", a 2015 GM quarterly financial filing read, though the notice added, "production continues in Venezuela and no decision has been made to cease operations".

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.

GMV strongly rejects the arbitrary measures taken by the authorities and will vigorously take all legal actions, within and outside of Venezuela, to defend its rights. Nicolas Maduro, who is now the President, is continuing this tradition, though the country is passing through its worst economic condition in decades. Ford suspended operations at its Valencia plant in December because of slumping sales.

South American operations, which include Venezuela, account for a relatively small portion of GM's earnings and sales. Shares of the company was trading at $34.29 at 1800 GMT, after closing $33.79 per share on Wednesday.

The newspaper El Nacional is reporting that six members of Venezuela's opposition Justice First party were detained on O'Higgins Avenue in Caracas. If you would like to discuss another topic, look for a relevant article.

Other reports by VgToday

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