Venezuela's transformation to a socialist utopia has been well-documented on these pages. Recall:
- Venezuela Bolivar Devalues 89% in Start of New FX Market [9]
- Venezuela Devalues Bolivar By Another 44% For Some, Still 600% Higher Than Black Market Due To 50% Inflation [10]
- Venezuela's Maduro Averts Military Coup, Arrests Three Air Force Generals [11]
- Venezuela About To Run Out Of Food Despite Fresh All Time High In Its Stock Market [12]
- Venezuela Sets New "Fair" Prices For Chicken, Sugar, Rice & Coffee [13]
- Socialist Paradise Central Planning In Action: Venezuela Looting Edition [14]
- Venezuela Plunges Into Darkness As President Maduro Lays Out Socialist Vision On National TV [15]
- No Spaghetti For You: Venezuela Noodle Maker Halts Production Due To Lack Of Dollars [16]
- No Drinking Water In Venezuela Until Bankers Get Paid Back [17]
- Venezuela Runs Out Of Toilet Paper [18]
- Breathing The Air In Venezuela? Prepare To Pay [19]
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 [20], 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.
