For years, Venezuela has been run by socialist dictators who have exploited its people and denied them economic and political opportunities. Ever since its President, Hugo Chavez, died in 2013, the country has been run by Nicolas Maduro, who many see as a brutal dictator, causing the standard of living for his people to continue to decline.
Maduro’s oppressive policies have resulted in violent protests across Venezuela over the past several years, with the government using extreme tactics to silence free speech.
With Venezuela in chaos, one American company has been caught up in the unrest, as General Motors is reporting that its plant in the country has been seized, without notice, by the government.
GM’s Venezuela division said it was ceasing operation after plant was “unexpectedly taken by the public authorities” https://t.co/jR8PKk3ty2
— The New York Times (@nytimes) April 20, 2017
From CNN Money:
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.
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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.
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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.
Given the civil and political unrest across Venezuela, one has to wonder why General Motors would continue to operate a plant there. For the most recent data available, GM sold nearly 100,000 cars in Venezuela, and over 500,000 in Brazil, the country with the third largest percentage of total worldwide GM sales. The large market for cars in South America explains why General Motors would build and sell cars in countries like Brazil and Venezuela, but Venezuela was a significantly less valuable marketplace than its neighbors.
Thankfully no workers were hurt when Venezuela took over the factory, but it should raise some serious concerns about American companies that do business in socialist countries. If a country like Venezuela will simply take over General Motors’ plant without notice, then other companies are in danger as well.
The question that remains is what, if any, action the U.S. government should take to protect U.S. companies from being threatened abroad.
How should General Motors, and the United States government, respond to Venezuela’s actions? Share your thoughts below!