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General Motor Says Venezuelan Authorities Illegally Seized Its Auto Plant

Joe White & Alexandra Ulmer
April 20, 2017
Business Insider

General Motors said on Wednesday that Venezuelan authorities had illegally seized its plant in the industrial hub of Valencia and vowed to "take all legal actions" to defend its rights.

The seizure comes amid a deepening economic crisis in leftist-led Venezuela that has already roiled many US companies.

"Yesterday, GMV's (General Motors Venezolana) plant was unexpectedly taken by the public authorities, preventing normal operations," the company said in a statement. "In addition, other assets of the company, such as vehicles, have been illegally taken from its facilities."

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

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

Venezuela's car industry has been in free fall, hit by a lack of raw materials stemming from complex currency controls and stagnant local production, and many plants are barely producing.

In early 2015, Ford Motor Co. wrote off its investment in Venezuela when it took an $800 million pre-tax write-down.

The country's economic crisis has hurt many other US companies, including food makers and pharmaceutical firms. A growing number are taking their Venezuelan operations out off their consolidated accounts.

Venezuela's government has in the past taken over factories. In 2014, the government announced the "temporary" takeover of two plants belonging to the US cleaning products maker Clorox Co., which had left the country.

Venezuela faces about 20 arbitration cases over nationalizations under the late leader Hugo Chavez.

(Reporting by Joe White and Alexandra Ulmer; writing by Alexandra Ulmer; editing by Edwina Gibbs)