Tur­moil in Venezuela

U.S. au­tomaker’s fac­tory is seized as protests against Maduro surge

The Washington Post - - FRONT PAGE - BY NICK MIROFF

As protests against Pres­i­dent Ni­colás Maduro revved up, the gov­ern­ment seized a GM auto plant.

Gen­eral Motors an­nounced on 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 antigov­ern­ment protests swell.

The plant takeover hap­pened on the same day that huge crowds of de­mon­stra­tors marched against Pres­i­dent Ni­colás 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.

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

The com­pany is not the first for­eign firm whose as­sets have been con­fis­cated by Venezue­lan au­thor­i­ties, but those ac­tions have typ­i­cally been pre­ceded by re­peated pub­lic threats from the so­cial­ist gov­ern­ment.

Venezue­lan of­fi­cials of­fered no ex­pla­na­tion for the seizure of the GM fa­cil­ity. Some an­a­lysts saw it 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 that 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-based 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 state-run.”

On Wed­nes­day, a Venezue­lan court in the western state of Zu­lia or­dered the U.S. com­pany’s as­sets frozen and its prop­erty seized, sid­ing against GM in a law­suit filed by a former GM dealer in 2000, ac­cord­ing to Venezue­lan news ac­counts. Why the court is­sued the rul­ing more than 16 years later, at the peak of an­tiMaduro 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. Po­lice fired tear gas at de­mon­stra­tors, but the crowds ap­peared to be smaller than Wed­nes­day’s marches.

In its state­ment de­nounc­ing the takeover of its fac­tory, GM said it has op­er­ated in Venezuela since 1948. The Detroit au­tomaker said ve­hi­cles and other prop­erty were “il­le­gally taken from its fa­cil­i­ties” as well.

Pro­duc­tion at the GM plant in the city of Va­len­cia had vir­tu­ally halted be­cause of gov­ern­ment im­port re­stric­tions and short­ages of raw ma­te­ri­als. Union lead­ers at the plant said in Fe­bru­ary that GM had not as­sem­bled any new ve­hi­cles in Venezuela since 2015 and was lim­it­ing pro­duc­tion to re­place­ment parts.

For­eign firms that have pulled out of Venezuela or whose prop­er­ties have been ex­pro­pri­ated rarely re­ceive com­pen­sa­tion and have strug­gled to collect on in­ter­na­tional court judg­ments against the cash-squeezed gov­ern­ment.

Last year, au­thor­i­ties seized a plant owned by U.S.-based multi­na­tional Kim­berly-Clark, re­nam­ing it af­ter a 16th-cen­tury indige­nous leader who re­belled against Span­ish colo­nial rule. But di­a­pers, san­i­tary nap­kins and other health prod­ucts man­u­fac­tured at the plant re­main scarce in Venezuela be­cause of acute 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 the move 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.” Mar­i­ana Zuñiga in Cara­cas con­trib­uted to this re­port.



Paramedics treat a woman af­fected by tear gas dur­ing antigov­ern­ment demon­stra­tions in Cara­cas. Venezue­lan of­fi­cials of­fered no ex­pla­na­tion for the seizure of a Gen­eral Motors fa­cil­ity in Va­len­cia.

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