General Motors Halts Operations in Venezuela After Authorities Seize Auto Plant

View of mass march against Venezuelan President Nicolas Maduro, in Caracas, April 19, 2017 / Getty
April 20, 2017

General Motors said Wednesday that local authorities in Venezuela "illegally seized" one of its plants, causing the auto company to cease all operations in the country as its political and economic crisis deepens.

Venezolana, General Motors' Venezuelan subsidiary, issued a statement on the incident.

"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.

GM also announced, "immediate cessation of its operations in the country," blaming the Venezuelan government for "irreparable damage" to the company's 2,678 workers and 79 dealers in the country.

The auto maker also vowed to take "all legal actions" necessary in response to the seizure.

"[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," the statement said.

Venezuela's Information Ministry did not immediately respond to a request for information by Reuters.

It was not immediately clear why authorities seized the GM plant, but the Venezuelan government, run by a socialist political party, has taken over factories owned by American companies in the past. In 2014, the government seized two plants owned by cleaning supplies producer Clorox Co. which had left the country.

Nationalizations under late Venezuelan President Hugo Chavez resulted in around 20 arbitration cases that are still pending.

The GM plant seizure came the same day that hundreds of thousands of Venezuelans took to the streets in at least 12 cities across the country to protest Venezuelan President Nicolas Maduro's government. The protesters clashed with security forces, with tear gas being used in Caracas, the country's capital, where a teenage boy was reportedly shot in the head by what government opponents claim was a pro-government militia.

At least five people died during the protests, while hundreds were arrested.

Venezuela continues to be devastated by an ongoing political and economic crisis. Socialist policies under Maduro have helped caused inflation to skyrocket and food and medicine to become scarce, among other issues.

The dire economic situation led an opposition campaign to form last year and demand a referendum vote on Maduro's rule. The government responded by putting down protests, which have reemerged this month after two Venezuelan Supreme Court decisions, one which revoked legal immunity protecting Venezuelan legislators and another which dissolved the opposition-controlled legislature.

The Organization of American States called the rulings an "auto-coup d'etat."

The court later reversed its decision stripping Venezuela's congress of the last traces of its power, but many observers fear the country is becoming an authoritarian state under a socialist government.

Published under: General Motors , Venezuela