General Motors says it will immediately halt operations in Venezuela after its plant in the country was unexpectedly seized by authorities.

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By:  @community, 2 months ago
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GM(GM) described the takeover as an "illegal judicial seizure of its assets."

 

The automaker said the seizure showed a "total disregard" of its legal rights. It said that authorities had removed assets including cars from company facilities.

"[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," it said in a statement.

Authorities in Venezuela, which is mired in a severe economic crisis, did not respond to requests for comment.

It was not immediately clear why authorities seized the GM plant. Huge swaths of Venezuela's economy have been nationalized in the years since former President Hugo Chavez rose to power. Under Chavez, who took office in 1999, the state took control of private oil, telecommunications, energy and cement businesses.

President Nicolas Maduro has continued the tradition, while blaming the United States and its companies for Venezuela's economic and political problems.

"Government decision making is increasingly incoherent. It's difficult to understand the rationale," said Nicolas Watson, head of Latin American research at Teneo Intelligence.

Automakers in the country have struggled because they've been unable to access U.S. dollars to import parts, said Watson.

The GM plant in Valencia employs nearly 2,700 workers, but stopped producing cars in 2015 and has only been selling spare parts since then, a company spokesperson said.

GM said it would make "separation payments" to its workers.

Venezuela is in crisis mode: The country's economy shrank by 18% in 2016 -- its third consecutive year of recession. Unemployment is set to surpass 25%, and its people have suffered from widespread shortages of food and medicine.

Hyperinflation has wiped out the value of its currency, the bolivar. The price of consumer goods has skyrocketed.

Large-scale protests erupted in recent weeks after Maduro's administration barred opposition leader Henrique Capriles from holding political office for the next 15 years. At least nine people have been killed in the protests.

Maduro has been accused by the opposition of behaving like a dictator.

In late March, the loyalist-backed Supreme Court tried to strip the opposition-led National Assembly of its powers, but quickly reversed course after a severe public outcry. The Supreme Court also blocked all reforms from opposition lawmakers.

Related: As protests swell, Venezuela spirals into 'deep economic crisis'

A slew of global firms have pulled out of the country or been forced to halt operations as a result of government interference or moves to put key sectors of the economy under state control.

ExxonMobil(XOM) pulled the plug on its operations in Venezuela in 2007 after former President Hugo Chavez attempted to nationalize one of its projects. The oil producer then took the government to court.

In 2016, Kleenex maker Kimberly-Clark (KMB) suspended its operations in Venezuela, citing the country's "rapidly escalating inflation" and the "continued deterioration of economic and business conditions."

The government called the closure illegal. It took over operations at the facility days later, according to state-run media.

Related: GM isn't the only company under siege in Venezuela

Coca-Cola(KO) was also forced to halt production of Coke and other sugar-sweetened beverages last year due to a sugar shortage.

http://money.cnn.com/2017/04/20/news/gm-venezuela-plant-seized/index.html

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96WS6
link 04/21/17 10:40:46AM @96ws6:

Socialism at it's finest.

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Spikegary
link 04/21/17 10:53:13AM @spikegary:

Amazing how they can't even provide the easiest essential items to their population, but will seize assets that don't belong to them and wipe out jobs.  There doesn't seem to be any rhyme or reason besides up top, where 'It's good to be King'.

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Dean Moriarty
link 04/21/17 11:00:26AM @dean-moriarty:

That GM socialism didn't work out too well for us either.

GM has earned a stunning $22.6 billion since the dark days of the financial crisis, when the automaker was bailed out by the U.S. government. Taxpayers didn't fare nearly as well. They'd lost $10.6 billion by the time the U.S. Treasury department closed the books on the $49.5 billion bailout in December.

http://money.cnn.com/2014/05/29/news/companies/gm-profit-bailout/

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DF
link 04/21/17 02:51:54PM @df:

GM=Government Motors.  Well our government lost more now that Venezuela stole the plant from our government.

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Cerenkov
link 04/21/17 11:06:40AM @cerenkov:

Venezuela will likely never recover from these dictators.

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Dowser
link 04/21/17 02:28:40PM @dowser:

I don't blame GM one bit.

However, comparing it to health care seems to be a bit of a stretch...

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Randy
link 04/22/17 08:20:33PM @randy:

However, comparing it to health care seems to be a bit of a stretch...

A bit? A New York to Tokyo leap is more like it!

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TTGA
link 04/22/17 02:11:08PM @ttga:

Obviously Venezuela wasn't a great move.  The country is bad for GM and for it's own people.  I recall very clearly that, when GM first started moving jobs out of the US, the GM CEO was told, "If you think that the UAW is bad, just wait till you start having problems with the foreign governments.  They don't have the restrictions that ours has and will take everything from you".  But, of course, he was just soooooo smart and could safely break the union.  They haven't seen anything yet, China is worse than Venezuela ever thought of being (as far as they're concerned, your property is theirs) and Mexico is almost as unstable.  I just wish Roger Smith was still alive so we could watch his policy blow up in his face.

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DF
link 04/22/17 02:30:41PM @df:

Just doing trucks.

All F-150s are made in the USA, all F250s also and so on and so forth.

GM/Chevy half their trucks are made in either Mexico, or Canada Some are made here in the USA. Dodge is basically the same half over seas and half here.  

This is just for trucks.  All cars and minivans and SUV are split between here and Mexico, Canada, Japan and China.and Korea.  It is strange though that the TOYOTA Camry and the Camry Hybrid are made solely here in the US.

I found this on line when researching where vehicles were made.  Now for those that will say that some parts are made over seas, YES, many are, but we do have a AISIN plant here in southern Il. that makes parts for autos.

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Kavika
link 04/22/17 03:28:20PM @kavika:

Just a though. What if all foreign car companies decided to close their US plants in protest to an isolationist view taken by the US?

How many jobs would be lost. Add to that the parts companies that help supply these companies and you'd see a huge jump in unemployment in the US.

Auto's are a world wide business. For car companies and that isn't going to change IMO. Building plants in foreign countries is simply good business sense for the companies.

In 2011, Toyota employed a bit over 400,000 at their auto plants, parts plants and auto dealerships in the US.

Interesting scenario if all car companies only manufactured and assembled in their home country.

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Kavika
link 04/22/17 04:33:20PM @kavika:

That should read, Toyota, Nissan and Honda...not just Toyota.

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DF
link 04/22/17 03:45:36PM @df:

If all American car companies brought back alltheir auto plants and parts plants back to the US. I think it would balance out firly well.  But I agree that the auto industry is a world wide industry. I was just making a point about Trucks mainly.

 

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XXJefferson#51
link 04/22/17 05:09:41PM @xxjefferson51:
Most Mercedes and BMW SUV's as well as SUV's, minivans and pickups from Toyota, Honda, Nissan are made here along with many models of Kia and Hyundai.  Almost all of this manufacturing occurs in red or purple lower tax right to work states.  Now that much of the area American named autos are made are right to work too, it will be interesting how many workers at new plants Ford and GM are building will choose to do without the union.

 

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DF
link 04/22/17 05:33:26PM @df:

True but my concern was just with the trucks.  only Ford makes all their trucks in the US. all the others are mde in many different countries.  That was my only point. 

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XXJefferson#51
link 04/22/17 08:13:02PM @xxjefferson51:
Ok.  I just don't want to become so protectionist that other countries forbid their local brands from making things here.  We must remember that some 20% of our manufacturing and high end service jobs are dependent upon our being able to export products abroad.  Americans working in America for foreign owned companies is another large segment of jobs we can ill afford  to lose.  If Ford can make all its pickups here and still sell some abroad, more power to them.  I have no real problem if GM builds a factory in a distant nation and then sells those products in that nation.  What many object to is if they closed a factory in the USA and built one in that other country to bring the product back here.  I don't want a replay of the Smoot-Hawley tariff of the early 1930's.
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DF
link 04/22/17 08:21:55PM @df:

That was also my point of those other companies building their trucks in different countries only to sell them here.  Ford builds the Ranger in Spain but it is not sold here, yet.  In 2019 year actually 2018 they start building them back in Detroit, like Trump said, then they will be sold here. The Bronco will also be built in Detroit and sold here in 2019.

 

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Randy
link 04/22/17 08:57:59PM @randy:

My VW Bug is almost all Mexican, except it has a Japanese transmission and some German electronic parts. My Fiat 500L is only 19% Italian, which is the engine and transmission. The rest is from various countries like Mexico, Japan and Serbia, which is where it's assembled. So my German car is not really German and my Italian car is not really Italian. My old Chevy Tracker was assembled in Canada completely of Japanese parts. Only the name was American.

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XXJefferson#51
link 04/22/17 10:00:11PM @xxjefferson51:

Your old Tracker was actually a rebadged Suzuki.  As was the Metro whether they had the Chevy or Geo label on it.  There was also a Geo coupe that was made by Isuzu in those days.  

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