General Motors has accused the Venezuelan government of an “illegal judicial seizure of its assets” and vowed to “take all legal actions” to regain control of its plant in the city of Valencia.
The unexpected move by the embattled government of Venezuelan President Nicolas Maduro is the latest in a series of moves meant to nationalize foreign-owned assets first started by former President Hugo Chavez. It comes as hundreds of thousands of citizens have been taking to the streets to protest what opposition leaders have described as an increasingly “dictatorial” situation.
“Yesterday, GMV’s (General Motors Venezolana) plant was unexpectedly taken by the public authorities, preventing normal operations. In addition, other assets of the company, such as vehicles, have been illegally taken from its facilities,” GM said in a statement.
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The automaker first set up the GMV subsidiary in 1948 and, like competitors, prospered during the years when Venezuela became one of the world’s biggest producers of oil. But things started to get shaky after Chavez, a former army officer, led a socialist revolution that painted the rich and corporations – especially foreign-owned ones – as the enemy of the people.
The economic situation, and the auto market in particular, has only worsened since Maduro came to office, ramping up his mentor’s rhetoric.
“Don’t underestimate me, bourgeoisie,” Maduro has warned. “If I have to take over companies, I will.”
Under Chavez, the government nationalized the oil, energy, telecomm and cement businesses. This appears to be the first time it has moved on an automotive manufacturer, however.
In recent months, Maduro and his allies have tried to shift blame for rampant inflation, unemployment and shortages of critical goods by accusing manufacturers and distributors of hording or illegally restraining production.
It is unclear, however, precisely what the government’s intentions are regarding the GM plant in Valencia, the government declining to respond to queries by various news organizations. But some observers are speculating it could be positioned as an attack on the U.S. government which both Chavez and Maduro have long positioned as an enemy of Venezuela’s socialist policies.
The irony is that the current president contributed about $500,000 to help fund the inauguration of incoming president Donald Trump, significantly more than a number of major U.S. corporate contributors, according to a report released this week by the Associated Press.
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GM said the seizure of the Valencia plant would cause irreparable damage to the company, as well as the factory’s 2,678 workers, its 79 Venezuelan dealers and suppliers.
But the plant was already operating at a minimal level as hyperinflation and other economic issues have resulted in huge declines in the country’s once-profitable automotive industry.
The takeover comes at a time of rising tensions on the streets of Caracas, the capital, and other cities across Venezuela, with neither government nor opposition leaders ready to move towards reconciliation. At least three citizens were killed in yesterday’s demonstrations.
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