This really just happened.
General Motors has just announced that in the wake of Venezuelan authorities illegally seizing one of its production plants in the industrial hub of Valencia, it has decided to shut down operations in the South American country entirely. According to Reuters, this move by Venezuela is yet another, although much more extreme, example of the increasing economic crisis between the Communist-like country and several US companies. GM has vowed that it’ll "take all legal actions" to defends its rights and property.
The automaker stated the plant "was unexpectedly taken by authorities, preventing normal operations. In addition, other assets of the company, such as vehicles, have been illegally taken from its facilities." Aside from causing "irreparable damage to the company," a total of 2,678 workers, 79 dealers and many suppliers are also being affected. GM did add that it would pay separation benefits, assuming local authorities won’t get in the way. For its part, the Venezuelan Information Ministry had no immediate comment. This isn’t the first time Venezuela has taken over factories, and it’s really a dumb move on its part for several reasons, one of which is the fact that its car industry has been in a freefall because of a lack of raw materials.
That can be blamed on complex currency controls and other consequences of nationalization. The country’s economy is experiencing triple-digit inflation following the collapse of global oil prices in 2014. GM isn’t the only automaker to have had trouble in Venezuela recently. A couple of years ago, Ford wrote off its investment in the country following an $800 million pre-tax writedown. Surprisingly, GM is somewhat confident a solution can be found so that it can "continue leading the Venezuelan market." Big business and communism. The feud continues.