Venezuela takes over GM site

Sun Sentinel Broward Edition - - FRONT PAGE - By Nick Miroff

Auto com­pany an­nounces it is leav­ing coun­try amid po­lit­i­cal tur­moil.

Gen­eral Motors an­nounced Thurs­day that it was pulling out of Venezuela af­ter au­thor­i­ties seized its auto plant in a fresh sign of the tur­moil grip­ping the South Amer­i­can coun­try as anti-gov­ern­ment protests swell.

The plant takeover hap­pened as huge crowds of de­mon­stra­tors marched against Pres­i­dent Ni­co­las Maduro’s gov­ern­ment, call­ing for new elec­tions and a re­turn to demo­cratic rule. The move against GM could fur­ther strain re­la­tions be­tween Venezuela’s left­ist gov­ern­ment and Wash­ing­ton.

The State Depart­ment said Thurs­day it was re­view­ing details of the case but called on au­thor­i­ties to act swiftly and trans­par­ently to re­solve the dis­pute. “A fair, predictable and trans­par­ent ju­di­cial sys­tem is crit­i­cal to im­ple­ment­ing the es­sen­tial eco­nomic re­forms crit­i­cal to restor­ing growth and ad­dress­ing the needs of the Venezue­lan peo­ple,” spokesman Mark Toner said.

GM called the ex­pro­pri­a­tion of its fac­tory “an il­le­gal ju­di­cial seizure of its as­sets” and an­nounced it would cease op­er­a­tions in the coun­try, where it em­ploys nearly 2,700work­ers.

Venezue­lan of­fi­cials of­fered no ex­pla­na­tion for its seizure of the GM fa­cil­ity. Some an­a­lysts sawit as part of a pat­tern of con­fronta­tion be­tween the Maduro gov­ern­ment and man­u­fac­tur­ers as the eco­nomic sit­u­a­tion de­te­ri­o­rates. But the tim­ing of the move also led to sus­pi­cions that Maduro may be look­ing to es­ca­late ten­sions with the United States and blame his gov­ern­ment’s strug­gles on a brew­ing con­fronta­tion with the Trump ad­min­is­tra­tion. Maduro claims his op­po­nents are col­lud­ing with U.S. au­thor­i­ties to over­throw him.

“It fits a broader pat­tern, in the sense that the gov­ern­ment’s re­sponse to surges in op­po­si­tion ac­tiv­ity tends to be the deep­en­ing of the rev­o­lu­tion,” said Phil Gun­son, a Venezuela-an­a­lyst for the In­ter­na­tional Cri­sis Group, us­ing the gov­ern­ment’s term for its so­cial­ist makeover of Venezue­lan so­ci­ety. “There are those at the top, in­clud­ing Maduro him­self, who ap­pear gen­uinely to be­lieve that this is a rev­o­lu­tion and the ul­ti­mate goal is the re­place­ment of the cap­i­tal­ist econ­omy with one that is en­tirely staterun.”

On Wed­nes­day, a Venezue­lan court in the state of Zu­lia or­dered the U.S. com­pany’s as­sets frozen and its prop­erty seized, sid­ing against GM in a suit filed by a former GM dealer in 2000, ac­cord­ing to Venezue­lan news ac­counts. Why the court is­sued the rul­ing 16 years later, at the peak of anti-Maduro protests, was un­clear.

The au­tomaker said the ju­di­cial or­der was “ar­bi­trary” and “in to­tal dis­re­gard of (GM’s) right to due process, caus­ing ir­repara­ble dam­age to the com­pany.”

Auto man­u­fac­tur­ing has vir­tu­ally come to a halt in Venezuela amid a broader eco­nomic col­lapse un­der Maduro. The econ­omy con­tracted by an es­ti­mated 18 per­cent last year as the coun­try faced one of the world’s high­est in­fla­tion rates and suf­fered wide­spread short­ages of food and medicine.

Once one of Latin Amer­ica’s wealth­i­est na­tions, the oil-rich coun­try has wit­nessed a broad, painful with­er­ing of in­dus­trial ac­tiv­ity.

Protests against Maduro con­tin­ued Thurs­day, but the crowds ap­peared to be smaller than dur­ing Wed­nes­day’s marches.

Pro­duc­tion at the GM plant in the city of Va­len­cia had idled due to gov­ern­ment im­port re­stric­tions and short­ages of raw ma­te­ri­als.

David Smilde, a Venezuela ex­pert at the non­profit Wash­ing­ton Of­fice on Latin Amer­ica, said that de­spite the tim­ing of the GM takeover, he didn’t see the­move as an at­tempt to “tweak the U.S.”

“It is part of a broader pat­tern in which big man­u­fac­tur­ers re­duce their ac­tiv­ity to a trickle be­cause they can­not get the dol­lars to im­port the in­puts they need to pro­duce,” he said. Then the gov­ern­ment ac­cuses them of re­duc­ing pro­duc­tion as part of an ‘eco­nomic war.’ The stand­off ends ei­ther with the com­pany clos­ing shop or the gov­ern­ment seiz­ing its as­sets.”


Po­lice of­fi­cers pro­tect them­selves from tear gas dur­ing protests Thurs­day in Cara­cas, Venezuela’s cap­i­tal.

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