General Motors writes down Venezuela operations following seizure of plant

by SpeedLux
General Motors

General Motors stated it would take a charge of approximately $100 million after a judge ordered the seizure of its plant located in Valencia last month, a move that triggered the halting of its operations in Venezuela.

The largest U.S. car manufacturer stated it was deconsolidating its company in the nation following the seizure of its Valencia plant on April 18 by judicial authorities, which resulted the automaker to fire 2,700 employees. The plant had not produced a vehicle since the start of 2016 because of parts scarcities and strict currency controls.

GM, the market leader in the country for 35 years, said executives have revealed a determination “to talk with government officials and union leaders about the scenarios under which it could be possible to start production and employ some amount of employees with a brand-new, practical business model.”

Overall auto production in Venezuela dropped to a historical low of 2,849 cars in last year, about 75 percent less than the year before, as per Venezuela’s automobile industry group.

In the first two months of this year, overall Venezuelan vehicle production was just 240 vehicles, below 50 percent over the exact same period in 2016.

Decreasing automobile production comes in the middle of increasing protests. On Tuesday, Venezuela’s opposition was blocking streets to decry President Nicolas Maduro’s choice to create a new super-body called a “constituent assembly,” a move they say is a veiled effort to cling to power by preventing elections.

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