GM factory shuttered as unrest grows
VALENCIA, Venezuela — General Motors said Thursday that it was shuttering its operations in Venezuela after authorities seized its factory in the country, a move that could draw the Trump administration into the escalating chaos engulfing the South American nation amid days of deadly protests.
The plant in the industrial city of Valencia was confiscated on Wednesday as antigovernment protesters clashed with security forces and progovernment groups in a country battered by economic troubles, including food shortages and tripledigit inflation. Three people were killed and hundreds arrested in the deadliest day of protests since the unrest began three weeks ago.
The seizure arose from an almost 20-year-old lawsuit brought by a former GM dealership in western Venezuela. The dealership had been seeking damages from GM of about $665 million at the official exchange rate, but $115 million on the black market where many Venezuelans are forced to turn to sell their increasingly worthless currency. GM said it was notified this week that a low-level court ordered the seizure of its plant, bank accounts and other assets in the country.
Hundreds of workers desperate for information about their jobs gathered at the plant on Thursday to meet with government and military officials, as well as representatives of the dealership that brought the lawsuit. The neglected factory hasn’t produced a car since 2015, but GM still has 79 dealers that employ 3,900 people in Venezuela, where for decades it was the market leader.
General Motors’ announcement comes as Venezuela’s opposition looks to keep up pressure on President Nicolas Maduro, taking to the streets again Thursday a day after the biggest antigovernment demonstrations in years.
It’s not the first time the Venezuelan government has seized a foreign corporation’s facilities. In July, the government said it would take over a factory belonging to KimberlyClark Corp. after the American personal care giant said it was no longer possible to manufacture because materials weren’t available in Venezuela.
But the move against GM, the United States’ biggest automaker, was a much more powerful statement, and could lead to a further erosion of relations between the two countries.
“This is a test case for Trump,” said Raul Gallegos, the author of a book on Venezuela and an analyst at Control Risks consultancy. “His response to a rogue nation taking over the assets of a brand-name U.S. company will be indicative of the road it wants to take with Venezuela.”
The seizure came as tens of thousands of protesters demanded elections and denounced what they consider to be an increasingly dictatorial government.
Overnight, a National Guard sergeant was killed and a colonel wounded when their squad was attacked with gunfire while trying to control disturbances in a city near Caracas, the chief prosecutor’s office said.