Venezuela Seizes General Motors Car Plant

Tyler Durden's picture

While the US has a habit of invading or attacking sovereign nations any time the president's approval rating dips below a certain threshold, Venezuela has a similar, if less dramatic mechanism to provide a brief boost to Maduro's popularity: it nationalizes foreign plants on its soil.

It did so last July, when the country was once again suffocating under a wave of violent protests, when just hours after Kimberly-Clark said it will shutter its Venezuela operations after years of grappling with soaring inflation and a shortage of hard currency and raw materials, Venezuela retaliated by announcing it would seize the factory.

It did so again overnight, when General Motors said on Wednesday that Venezuelan authorities had illegally seized its plant in the industrial hub of Valencia; as a result the carmaker said it would immediately halt operations in Venezuela.

"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," the company said in a statement.

The automaker said the seizure showed a "total disregard" of its legal rights. "[GM] 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."

GM's subsidiary in the country - General Motors Venezolana - has operated in Venezuela for nearly 70 years. It employs nearly 2,700 workers and has 79 dealers in the country. GM said it would make "separation payments" to its workers.

While the US carmaker vowed to defend its rights, it has no chance of success of recouping its property under the current regime, which no longer recognize either local or international law. The seizure comes amid a deepening economic crisis in leftist-led Venezuela that has already roiled many U.S. companies.

GM said the seizure would cause irreparable damage to the company, its 2,678 workers, its 79 dealers and to its suppliers.

The seizure will hardly be of use to the Maduro regime as Venezuela's car industry has been in freefall, hit by a lack of raw materials due to lack of foreign currency to fund imports and stagnant local production, with many plants are barely producing at all. Last month, according to official statistics, only several hundred cars were sold. 

GM is not the first US carmaker to suffer the irrational wrath of Venezuela's dictator: in early 2015, Ford wrote off its investment in Venezuela when it took an $800 million pre-tax writedown. Others have been hit too, and as a result a growing number of US companies are taking their Venezuelan operations out off their consolidated accounts. ExxonMobil pulled the plug on its operations in Venezuelan in 2007 after former President Hugo Chavez attempted to nationalized one of its projects. The oil producer then took the government to court. Coca-Cola was forced to halt production of Coke and other sugar-sweetened beverages last year due to a sugar shortage.

Finally, for those seeking legal remedies, we have one word of advice - patience: Venezuela still faces around 20 arbitration cases over nationalizations under late leader Hugo Chavez.

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Argenta's picture

Why would GM build a car plant in Venezuela? Or moreover, why would they continue to operate it after Chavez came to power?  

-Argenta

Haus-Targaryen's picture

No sympathy.  None what so ever.  None for GM, none for Maduro and literally zero for any Venezuelan who voted for socialists. 

 

Ghost of PartysOver's picture

I tried but could shed no tear for GM.  Perhaps GM would consider plants in the USA. 

Twee Surgeon's picture

I love the smell of Socialist Desperation in the morning, It smells like......Victory. https://www.youtube.com/watch?v=k26hmRbDQFw

BaBaBouy's picture

Don't Panic... The Authoritites just want the Toilet Paper Stocks of the GM Plant...

Twee Surgeon's picture

Probably. A 4 pack of Charmin two ply will buy you a cottage near the beach right now.

MagicHandPuppet's picture

And the atlas shrugged.

Eat it, GM, LOL!!!

giovanni_f's picture

Maduro just adopted what in the US is called "civil forfeiture". The affected party has simply to follow the due process and everything will be alright.

TruthHunter's picture

They will never get rid of this guy. He'll rule til he's 95 like Mugabe.

Economic activity willshift to USD and they'll limp along. 

 

What did they do to deserve this fate?

Is it because their dicks are bigger than their brains?   

http://klaq.com/worldwide-penis-survey-heres-the-chart-were-talking-abou...

 

twh99's picture

Only so long as he keeps the armed forces in Venezuela happy.  Once they don't like him, he will be looking for a new place to reside.  Whether it is another country or a nice plot, six feet deep.

Multi's picture

Isn't that a lovely present from the US Gov to the Vzla Gov? The US Gov already paid for GM (taxpayer bailout).

Ayo Vzla Gov! there you can have it, with love The Magic Kneegrow.

new game's picture

another country to bring democracy to. calling neocon fascists, your interest in government motors was siezed by another madman.

some childern are going to starve as the line shut down and no income. hurry, time is wasting, send in the f-16's with missles, 59 of them to be exact...

GunnerySgtHartman's picture

The Venezuelan socialists ran out of other people's money ... now they are appropriating other people's property!

Yog Soggoth's picture

Some countries attract investers, a long and boring process. Why bother, when you can take the investment and make it your own! Next comes ads on Craigslist for mercenaries. High pay, travel, work for one of the biggest companies in the US. NDA required, Cadillac bonus program.

HockeyFool's picture

Right. How long until Mejico starts commandeering factories? They aren't far behind Venezuela socially or economically.

new game's picture

neocon dream! moar countries to invade...

MEFOBILLS's picture

Venezuala has high sulfur content oil, which requires more effort to refine.  Are peasant Amerindians of Venezuala competent to do this?  The answer is no.

https://www.amazon.com/IQ-Wealth-Nations-Richard-Lynn/dp/027597510X

Could Chinese chemists do it?  The answer is yes.  So, to compare Venezuala to China is crazy.  The two countries are populated by different kinds of people.  The human capital of a country cannot be ignored, and this notion that it is all Socialism's fault is not good logic.  

Argentina was wealthy during the European immigration period.  After Amerindians moved in to find jobs, then things went downhill.  South Africa, after  Negros immigrated to get jobs, has devolved down to what it is today.

Consider, Venezuala is constantly under attack by Zion bankster crowd.  Any country that has oil is a target.   See Perkins book, Confessions of an Economic Hitman to understand mechansim.

Argentina is constantly under attack because of Patagonia.  Our Zionist Friends are keeping this region on their bucket list in case they need to jump from Israel and other points in the world.  It is considered the "practical country" that can house diaspora Jews.  And of course, Argentina is less European white than it used to be, and hence less able to resist, or even understand the assaults.

Argentina, a mirror of your (America's) future.

https://www.amren.com/features/2017/04/argentina-a-mirror-of-your-future...

 

 

RedBaron616's picture

Oh, sure, it's always the Zionist bankers. Chavez and Maduro, we apologize to you. Now we know. You did nothing wrong. The bozo above has the answer. And here we thought it was Socialism that failed. Imagine.

MEFOBILLS's picture

Socialism doesn't always fail.  It worked in nordic countries.  It worked for National Socialist Germany.  IT worked in Canada up until 1974 when their banking system changed.

It doesn't work when you have a non-homogenous population who vote themselves privledges. Sorry if facts are inconvenient.

Add hominems don't bolster arguments.

MEFOBILLS's picture

Here is Adrain Salbuchi describing how Patagonia is being targeted by world zionism.  When he talks about a century of planning, he is referring to Herzyl and world zion.  They had narrowed down their choices to Palestein, Patagonia, and a country in Africa whose name escapes me at the moment... I think Uganda.

And yes, it is very often the Zionist bankers.  If people here at ZH don't understand this by now, they ought to go bury their head in the sand.  Go back to sleep.  Take the blue pill.

 

Patagonia is the name of the southernmost region of Argentina comprising the provinces of Río Negro, Neuquén, Chubut, Santa Cruz and Tierra del Fuego, together with their Chilean counterpart regions on the Pacific Ocean side of the Andes Mountains.  This article highlights the growing signs that this South American Region has been targeted by the Global Power Elite and will be lost by both Argentina and Chile.  The Elite plan, in fact, can be traced back to over a century ago.  No surprise when you consider that Patagonia has incalculable wealth – oil, gas, minerals, food, water, fish, grains, cattle…

 

http://www.asalbuchi.com.ar/category/english/page/5/

LawsofPhysics's picture

only if the taxpayer is still willing to keep bailing them out....

see the problem yet?

onewayticket2's picture

this is a single plant.

obama seized the entire corporation.

Buck Johnson's picture

No kidding, at least they would know they can go to  court and the govt. wouldn't be that bold to take your company.  Move them all back to the US, every freaking one of them.

 

MaxMax's picture

Why would it be in Chavez's interest to sieze the plant?  He can steal whatever cars are already built, but he won't be able to continue building cars.  It is just a big warehouse filled with stuff he can't use.  It is not like a farm or oil well that you could possibly keep running fairly easily - and they screwed those up as well.

Haus-Targaryen's picture

I'd imagine the government there will liquidate contents of plant and sell the cars in other countries for cash.  

Watch carefully, when the USD loses reserve status, this exact thing will happen state-side. 

gladih8r's picture

They should contract Obama to help them run it.,,,,, Then setup a reality TV show based on its daily operations.  It would make millions on the comedy channel.

youngman's picture

They make a good third world bus there....we have thousands of them in Colombia.....they hold about 20 people and can go up and down the steep mountains here....going to be a loss for someone....

Mr Pink's picture

3rd world payroll, pay the toll

Mr.Sono's picture

Why would GM build a car plant in Venezuela? Or moreover, why would they continue to operate it after Chavez came to power?

-Argenta

Because GM is government motors.

Great Deceivah's picture

Argenta, Can you read? the article says the plant has operated for 70 years... 70 years, long before Chavez was even born. I love how idiots have opinions on the articles without even reading or understanding them.

RedBaron616's picture

Seeing a lot of that, particularly with this article. Nobody catches the 70 years of operations or why it would be advantageous to make cars for that area of the world there, as they are not the same as cars here.

stocker84's picture

Because we are talking about General Motors....they aren't very bright.

They had more revenues than GE and Toyota combined and yet they can't get out of their own way.

 

Fuckem, they should have been allowed to fail.

As Trump would say, they failed yugely. They are a fake car company.

lol

 

\speaking of Trump...whatever happened to America first?

whatever happened to make america great?

Backburner while he gets some stupid deep state shit out of the way?

What good is it on the backburner? WW III will wipe out all theback burners

SimmerDown's picture

@Argenta Had the US government not bailed them out, GM would have had to examine the viability of Venezuela during its bankruptcy (that never happaned). When the Fed/Treasury has your back...

 

Scooby Doo's picture

Maybe Trump wins bigly when GM is forced to bring production back to the US.  It's going to be quite a loss in the short term for GM.  I doubt that GM can force Chavez to pay for what he stole.

Grumbleduke's picture

at least the workers were cheap; 't was nice while it lasted.

Seasmoke's picture

Obama just came in Reggies mouth after hearing this. 

Chief_Illiniwek's picture

It's been my experience that car parts are a poor substitute for toilet paper.

SumTing Wong's picture

We won't ask how you experienced that. Tailpipe? (OK, we won't ask.)

youngman's picture

Go for their Citgo assets in the USA.....easy pickins I would say.....Buy the refinery and stop buying their heavy oil....the USA is one of the few places it can be refined.....

nmewn's picture

Apparently they need the floor space for the vast numbers of political prisoners that are expected  ;-)

TalkToLind's picture

When a government does it, why is it called "seized" instead of stole?

hedgeless_horseman's picture

 

Because of public education.

Calculus99's picture

It takes a very dedicated and special bunch of morons to fuck a country up that has so much oil.