General Motors Quits Venezuela After Officials Seize Plant

[thackney]

General Motors Quits Venezuela After Officials Seize Plant
http://www.nbcnews.com/news/world/general-motors-says-venezuelan-officials-illegally-seize-plant-n748741
APR 20 2017

General Motors said Wednesday it has been forced to stop operating in Venezuela after one of its plants was illegally seized by local authorities.

The seizure, in the country's industrial hub of Valencia, comes amid a deepening economic and political crisis that has sparked weeks of deadly street protests.

General Motors Venezolana, GM's local subsidiary, did not provide any details about the seizure, other than to say the facility "was unexpectedly taken by authorities, preventing normal operations." It said other assets, "such as vehicles," had also been stripped from the site.

The company said it "strongly rejects the arbitrary measures taken by the authorities and will vigorously take all legal actions, within and outside of Venezuela, to defend its rights."

Venezuela's Information Ministry did not immediately comment, according to Reuters.

Announcing "immediate cessation of its operations in the country," GM accused local officials of causing "irreparable damage" to the company and its 2,678 workers and 79 dealers in the country. GM said it would pay separation benefits "as far as the authorities permit."...

[IsailedawayfromFR]

It lost over a billion between 2014 and 2015 there, so why would it continue to operate there anyway?

Oil companies have been fooled twice and nationalized, and will not be fooled again.

[240B]

The exact same thing could easily happen in Mexico. All those American companies that moved to Mexico to save labor costs, may wind up losing their entire plants. And when it happens, it will happen suddenly overnight. There will be no warning.

[Suppressed]

The exact same thing could easily happen in Mexico. All those American companies that moved to Mexico to save labor costs, may wind up losing their entire plants. And when it happens, it will happen suddenly overnight. There will be no warning.

They should have talked to Francisco d'Anconia about the San Sebastián Mines.

[endicom]

Next door is Guyana, an English speaking nation of some 800,000 people. That's where Exxon went from Venezuela. GM could make a deal with the Guyanese government to relocate there, inviting over its old Venezuelan workers while creating some jobs for Guyanese workers.

Well, it's a thought.

[Weird Tolkienish Figure]

No sympathy for them. You build a plant in an unstable country, this is what you get.

[Joe Wooten]

No sympathy for them. You build a plant in an unstable country, this is what you get.

When they built the plant Venezuela was one of the more stable South American nations, though it was operating with very small margins. The voters went nuts and gave the Chavez family control and they destroyed the margins in short order and then went to work eating it hollow.

An implosion is inevitable and we should stay out completely. Let them be a hard lesson for anyone else who wants a socialist nation.

[driftdiver]

Doing business in the US is looking better and better.

However the folks that made the initial decision don't care, they got their bonus on the increased profits.

[Weird Tolkienish Figure]

When they built the plant Venezuela was one of the more stable South American nations, though it was operating with very small margins. The voters went nuts and gave the Chavez family control and they destroyed the margins in short order and then went to work eating it hollow.

An implosion is inevitable and we should stay out completely. Let them be a hard lesson for anyone else who wants a socialist nation.

You build a plant in a third world nation, this is a risk you face.

No bleep given.

[geronl]

Venezuela eats the cow and wonders why there is no milk.

[IsailedawayfromFR]

Doing business in the US is looking better and better.

Maybe.  We do have higher wages, more stifling regulations.  And don't forget the unions which achieve preserving worker pay even when they do not work.

However the folks that made the initial decision don't care, they got their bonus on the increased profits.

Since the decision was likely made immediately after WWII to build the plant in Venezuela, it is likely other factors were in play other than as simply getting a bonus.

During WWII, Venezuela had a booming economy due to its huge oil production and export and was a very attractive country to partner with.

Companies like GM had converted a majority of its US auto plants to the war effort, so it made sense to go elsewhere to produce autos right after the war while the domestic plants were retooled.  All those returning US servicemen were not prepared to buy a new car anyway at the time, so selling to the middle class in Venezuela also made sense.

[geronl]

Maybe.  We do have higher wages, more stifling regulations.  And don't forget the unions which achieve preserving worker pay even when they do not work.

If GM had closed the plant itself, by VZ law they would have to continue paying the employees indefinitely. This was a better option if they had wanted to close it anyway or if it was losing money.

[InHeavenThereIsNoBeer]

2017?

I thought for sure this article would be at least a decade old.

[Fishrrman]

Joe Wooten wrote:
"An implosion is inevitable and we should stay out completely. Let them be a hard lesson for anyone else who wants a socialist nation."

There will be no lessons learned by any socialists anywhere else ever.

Their response will be, "it won't happen here because this time we're going to do socialism right!"