General Motors Stops Operations in Venezuela

On Wednesday, General Motors announced that it was forced to stop its operations in Venezuela after one of its facilities had been seized illegally by local officials.

The seizure, in Valencia the industrial hub of the South American country, comes amidst a deepening political and economic crisis that sparked several weeks of street protests that have become deadly.

The local subsidiary of GM known as General Motors Venezolana, announced it rejected strongly the arbitrary actions taken by local authorities and would take vigorous legal actions in and outside Venezuela in defense of its rights.

The automaker did not release any further details related to the plant seizure, other than it had been taken over unexpectedly by authorities that prevented normal operations.

GM said other types of assets like vehicle were stripped from the facility.

The Information Ministry of Venezuela did not respond to several requests for comments by news agencies.

GM, due to the seizure, announced an immediate stop to its operations in Venezuela.

The announcement said authorities had a total disregard and had caused irreparable damage to the business and its more than 2,675 workers as well as 79 dealers across the country.

GM said separation benefits would be paid to the extent authorities would allow.

The carmaker said it had confidence that justice would eventually prevail and looked forward to leading the market in Venezuela on a continuing basis.

The car industry in Venezuela has plunged due to a lack of sufficient raw materials that stem from complex controls on currency, local production that has stagnated and several plants barely product anything.

The government of Venezuela has taken factories over in the past. During 2014, it announced a temporary takeover of two facilities that belonged to Clorox Co, the maker of cleaning products based in the U.S. The company left the country following the takeover.

Protests erupted recently across Venezuela after opponents of the President accused him of trying to form a dictatorship. This comes during a deep economic crisis that has included shortages of water, food, basic supplies and medicine.

During the early part of 2015, Ford Motor wrote off an entire investment in the South American nation when it took a write down before taxes of $800 million.

Venezuela is facing close to 20 arbitration cases related to nationalizations that were carried out when the late president Hugo Chavez was in power.

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