Venezuela's Transformation To Socialist Utopia Is Nearly Complete As Its Factories Grind To A Halt

Tyler Durden's picture

Venezuela's transformation to a socialist utopia has been well-documented on these pages. Recall:

In retrospect, one can only hope the same "socialist paradise" fate isn't headed to the other "fairness doctrine" members such as the US and France, because with socialist utopias like these who needs capitalist hell?

In any event, what utopia would be complete without a complete paralysis of the one sector that traditionally serves as the backbone of any functioning economy: no, not makers of iPhone apps... manufacturing.

As the WSJ reports, this car-crazed country's auto industry, once the third largest in South America, is seizing up as manufacturers struggle to produce a few vehicles a day. Apparently channel stuffing hasn't been revealed as a legitimate "retail channel" in the Latin American country just yet. As for subprime car purchase loans, US banks apparently don't offer those in Caracas. Yet.

Car makers, including global giants like Ford Motor Co. , Fiat Chrysler Automobiles NV, General Motors Co. and Toyota Motor Corp., have cut output by more than 80% in the first six months of the year compared with a year earlier because of a lack of dollars to pay parts suppliers, according to data compiled by the Automotive Chamber of Venezuela, which represents car makers.


"This is the first time I have ever seen things this bad," said 61-year-old Antonio Lopez, a Ford worker who recently prepared a sedan for painting at the auto maker's factory here. The cavernous Valencia plant, about 110 miles west of Caracas, was quiet by midafternoon one day last month, with a handful of workers sweeping up and maintaining equipment on assembly stations.


Across Venezuela, car production and sales has been sliding fast. Balance sheets have been battered, with revenue vulnerable to devaluation and trapped in Venezuela because of currency controls. Auto makers built 36,919 vehicles through June of last year. But only produced 6,161 during in the same period this year, about what Argentina produces in a few days.


Economists say the car industry, like newspapers, bottlers and food processors, has been hard hit by a shortage of dollars in Venezuela that has left many companies scrambling to pay for much-needed imports in a country that produces little more than oil. The reverberations in the economy include companies going out of business, a shortage of basic products and one of the world's highest rates of inflation.



"[Sales] volumes are down 75% below 2013, and last year was the lowest level in a decade," said Carlos Gomes, an economist who follows the global auto industry for Scotiabank. "I think it is fair to say that the situation is alarming."

Alarming maybe, but at least it is a socialist utopia. An utopia where it appears that the phones...

Venezuela's Communications Ministry declined to comment. The ministries of finance and industry didn't return phone calls. A spokeswoman for the Automotive Chamber of Venezuela, which represents foreign auto makers, said the group was in talks with the government and declined further comment.

.... also don't work.

And a quick glance at what is coming to every banana republic socialist utopia near you:

"I can't find anything. Prices are climbing daily," said Jesus Ramirez, a taxi driver who has spent a year trying to replace the 2008 Renault he purchased new for $7,441. He sold the car for over $30,000 five years later.


With inflation at 60% a year, among the highest in the world, Venezuelans protect their earnings by buying cars, among other big-ticket items.


Car parts needed to keep vehicles on the road have also become difficult to find. That has led thieves to steal parts such as batteries from parked cars.


The owner of a Caracas car dealership who said he last sold a vehicle in 2009, said he stays in business by servicing cars. But with spare part shipments tumbling 75%, he said, he fears his business may soon close.


"I spend all day on the phone looking for parts," the owner said, asking to remain nameless. "We are in survival mode."

Oops. Looks like someone forgot to BTFD, or rather BTFATH, and instead of being hopeful is cynical.

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ekm1's picture

Soon to occur in USA, unless QE is fully unwound which would mean about $4 trillion extinguished and further another $10 trillion to be extinguished due to staged collapses of 2 or 3 primary dealers

Dr. Engali's picture

It's coming to the U.S no matter what happens to the debt.

Skateboarder's picture

<-- Maduro is the bigger clown

<-- Obie is the bigger clown.

Pool Shark's picture



Stupid Venezuelans.

Even former Central American communists have figured out the answer is capitalism:

Daniel Ortega has transformed Nicaraugua from a communist warzone in the 80's, into "...the easiest country in Central America, Panama excepted, in which to start a new business."

Funny how former communist hell-holes (Vietnam, anyone?) seem to be embracing capitalism, while the western democracies are all racing towards socialism...


Anusocracy's picture

You are referring to governmental capitalism, fascism? It just runs out of money to steal a little bit slower than socialism.

Like the US and its camp followers.

durablefaith's picture

just got back from nica. great place for citizens. subsistence agriculture. true community. but the unwelcome sign is out in force. you can buy land. own . businesses. employ locals. you still have to leave nica several times per year. only path to citizenship that I am aware of is marriage to a local. 

all your land and business are belong to us...when we decide not to let you back in...

COSMOS's picture

Can't say I blame them, why would I want to sell out the land of my ancestors from underneath my feet to some gringos.  Only ones to do something that dumb are the Eastern Europeans suckers.

Escrava Isaura's picture

Pool Shark,

Your history is very distorted.

Are you sure that you haven’t been brainwashed?  

pods's picture

You do realize that if he has been brainwashed he is not going to be able to tell, right?


Escrava Isaura's picture

Darn. I just can’t think of all the side effects.

But glad you were able to draw attention to it.


BlindMonkey's picture

I just want to find my closest new car storage yard so I have an endless supply of parts no one needs.  

A Nanny Moose's picture

It's coming to the FORMER U.S no matter what happens to the debt.



JLee2027's picture

Forward! Into the ditch....

Oldwood's picture

If they can only hold on for a little longer....they will finally reach the utopia of their dreams.

Maybe the Chinese can rush in at the last possible moment and buy the whole country for the price of a claim on a warehouse full of copper...or is it really?

tbone654's picture

apparently I read that too fast...  Though you said "Whorehouse" full of copper, which would have a different value under true socialism...

wee-weed up's picture

A "Whorehouse" full of "Coppers?"

Yeah... that works!

SokPOTUS's picture

Thar's *gold* in them thar Hoes!

passenger_pidgin's picture

"With inflation at 60% a year, among the highest in the world, Venezuelans protect their earnings by buying cars, among other big-ticket items."

Seems like the perfect way to save GM.  Coming soon to a Banana Republic near you...


Colonel Klink's picture

I'd rather purchase PMs.  The government may try to recall PMs but it's a certainty that GMs will be recalled.

Pheonyte's picture

It's a lot harder to bury a car in your backyard too.

DoChenRollingBearing's picture

Good humor always gets green arrows from Bearing Guys...

COSMOS's picture

Yeah no kidding, and if you lose the car in a boating accident it would really affect the value later when you pulled it out.  Ask the people whose cars were flooded in Katrina.

Zeta Reticuli's picture

What is it with these South American countries and socialism? When they do it, it fails miserably. When they do it in Scandinavia, it works fine.

TeamDepends's picture

Oh yeah, they are just lovin' all the muslims streaming in!

Dangertime's picture

Socialism never fails in a day, month or year.


Give scandinavia will come.

TheRedScourge's picture

They're actually less socialist than most socialist countries, so it will take some time.

Monty Burns's picture

Scandinavian countries are welfare states, not socialist. Not the same thing. All countries there are capitalist-friendly. However they are indeed doomed because open borders and a welfare state are incompatible. As the Scandinavians are in the process of discovering.

Not My Real Name's picture

I say tomato, you say to-mah-to. Socialist state, welfare state. Blah blah blah. In the end, they both end up picking the pockets of those who produce and redistribute wealth to those who don't. Open borders or not.

Anusocracy's picture

Sweden's currency had a stroke a couple of decades ago and Norway is living off its oil.

The Bernanke Reaper will get them eventually.

TheReplacement's picture

Scandahoovia is backed by the US Military.  South Americans have to fend for themselves.

Scandahoovia does not have a persistent druglord problem.  South Americans do.

Scandahoovia has a history of civilization and rule of law.  South Americans do not.

Need more?

BlindMonkey's picture

Riddle me this smarty-pants.  Who has the hottest chicks?

COSMOS's picture

Boooring those chicks are ok, the latin women are best, not only looks but in bed also.  Those Scandinavian chicks lie in bed and do nothing, just like them boats in all those scandinavian harbors/havns hahaha.

rsnoble's picture

Yeah that wouldn't work for me cause I like to lie in bed and do nothing myself.  Unless they're money motivated i'm not interested.

COSMOS's picture

Now you understand why Denmark is having those public service commercials telling young couples to go on vacation and make babies.

The Most Interesting Frog in the World's picture

You should receive a Nobel Prize for that.

shovelhead's picture

And the Old Gods smile down on them from Asgaard.

The Most Interesting Frog in the World's picture

The white man is supposed to be so evil but compare the accomplishments, contributions to society and humanity of white men and there is no compare.

TBT or not TBT's picture

It's refreshing to hear the race angle voiced for once.  It really doesn't get enough play.  Now the fact is neither the Latin Americans nor the scandies look like Eric Holder's people or Trayvon so there are no possible race things here, but it is refreshing, just a great feeling.  

John_Coltrane's picture

Or to Summarize:  Scandahoovia is very very white with a culture to match (and I'm not just talking about all the snow!).  All those muslim immigrants should bring them back to the virtues of "diversity".

Statetheist's picture

What is it with these South American countries and coercion through violence? When they do it, it fails miserably. When they do it in Scandinavia, it works fine.

Pure Evil's picture

I believe the difference is in Scandanavia they actually dirstribute the wealth to all their citizens, while in the US the middle class wealth is distributed to the poor and the elite while leaving just enough to live on, while in countries like Venezula all the wealth goes directly into the pockets of Maduro and his cronies.

Maduro only has so much time left to amass a fortune out of what's left from the Chavez regime. He probably has no intention of sticking around longer than he has to, he doesn't want to come down with what Chavez caught.

DoChenRollingBearing's picture

True that!  Even evil speaks the truth sometimes.  Probably just enough to trap you...

Hobbleknee's picture

80% of my income goes to the government, so I can be denied mediocre first-aid and send my kids to my kids below-average schools.

Escrava Isaura's picture


Please tell us who does your tax..... so we can run away from that person

Hobbleknee's picture

I live in Sweden. This is the norm here.