GM operations in Venezuela seized as protests swell

DETROIT — General Motors became the latest corporation to have a factory or other asset seized by the government of Venezuela.

GM said Thursday that its only factory in Venezuela was confiscated a day earlier, as anti-government protesters clashed with authorities in a country that is roiled by economic troubles. GM said assets such as vehicles were taken from the plant, causing the company irreparable damage.

The seizure is the latest in a long string of government confiscations of factories and other assets that have been a staple of the so-called socialist revolution in Venezuela started by the late Hugo Chavez two decades ago. Venezuela is currently fighting claims of illegal asset seizures at a World Bank-sponsored arbitration panel from more than 25 companies, making it one of the most-frequently targeted nations in the world.

In March, a World Bank arbitration panel determined that Venezuela did not have to pay $1.4 billion to Exxon Mobil Corp. for confiscating company assets during a wave of nationalizations.

Auto production in Venezuela has nearly ground to a halt amid the country’s economic collapse. The cash-strapped government has choked off car companies’ access to dollars needed to import parts and repatriate profits. GM’s factory in the industrial city of Valencia has not produced a single car since 2015. Nationwide, carmakers assembled just 2,849 cars last year, from a peak of 172,218 vehicles in 2007.

Despite Venezuela’s grim outlook, many carmakers have decided to stay put and avoid the drastic step of shutting down operations to avoid losing market share in case the economy dramatically improves or a more business-friendly government takes power.

GM has about 2,700 workers in Venezuela, where it’s been the market leader for 35 years. It also has 79 dealers that employ 3,900 people, and its parts suppliers make up more than half of Venezuela’s auto parts market, the company said.