Tag Archives: General Motors

Venezuela Seizes General Motors Car Plant

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While the US has a habit of invading or attacking sovereign nations any time the president’s approval rating dips below a certain threshold, Venezuela has a similar, if less dramatic mechanism to provide a brief boost to Maduro’s popularity: it nationalizes foreign plants on its soil.

It did so last July, when the country was once again suffocating under a wave of violent protests, when just hours after Kimberly-Clark said it will shutter its Venezuela operations after years of grappling with soaring inflation and a shortage of hard currency and raw materials, Venezuela retaliated by announcing it would seize the factory.

It did so again overnight, when General Motors said on Wednesday that Venezuelan authorities had illegally seized its plant in the industrial hub of Valencia; as a result the car maker said it would immediately halt operations in Venezuela.

“Yesterday, GMV’s (General Motors Venezolana) plant was unexpectedly taken by the public authorities, preventing normal operations. In addition, other assets of the company, such as vehicles, have been illegally taken from its facilities,” the company said in a statement.

The automaker said the seizure showed a “total disregard” of its legal rights. “[GM] 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.”

GM’s subsidiary in the country – General Motors Venezolana – has operated in Venezuela for nearly 70 years. It employs nearly 2,700 workers and has 79 dealers in the country. GM said it would make “separation payments” to its workers.

While the US car maker vowed to defend its rights, it has no chance of success of recouping its property under the current regime, which no longer recognize either local or international law. The seizure comes amid a deepening economic crisis in leftist-led Venezuela that has already roiled many U.S. companies.

GM said the seizure would cause irreparable damage to the company, its 2,678 workers, its 79 dealers and to its suppliers.

The seizure will hardly be of use to the Maduro regime as Venezuela’s car industry has been in freefall, hit by a lack of raw materials due to lack of foreign currency to fund imports and stagnant local production, with many plants are barely producing at all. Last month, according to official statistics, only several hundred cars were sold. 

GM is not the first US car maker to suffer the irrational wrath of Venezuela’s dictator: in early 2015, Ford wrote off its investment in Venezuela when it took an $800 million pre-tax write down. Others have been hit too, and as a result a growing number of US companies are taking their Venezuelan operations out off their consolidated accounts. ExxonMobil pulled the plug on its operations in Venezuelan in 2007 after former President Hugo Chavez attempted to nationalized one of its projects. The oil producer then took the government to court. Coca-Cola was forced to halt production of Coke and other sugar-sweetened beverages last year due to a sugar shortage.

Finally, for those seeking legal remedies, we have one word of advice – patience: Venezuela still faces around 20 arbitration cases over nationalizations under late leader Hugo Chavez.

Source: ZeroHedge

GM to Import Chinese-made Buick Envision to U.S.

General Motors may be setting stage to import more of their China-made vehicles into the U.S.

The Buick Envision is a cross-over SUV made in Shandong in northeastern China.

The Buick Envision is a cross-over SUV made in Shandong in northeastern China. (General Motors)

General Motors Co. plans to start importing Chinese-made Buick Envision SUVs to the U.S., starting in 2016, according to a report in the Wall Street Journal.

It would be the first automaker to import cars made in China to the U.S. About 30,000 cars would be imported next year.

The Envision is made in GM’s plant in Shandong, a joint venture with a Chinese partner that until now has made vehicles for the domestic market.

However, the cross-over segment – a small or mid-sized SUV on a car chassis – is a hot market in the U.S. and the Envision would fulfill that demand.

Global automakers have been slow to ship Chinese vehicles to the U.S. and Europe, despite low-cost manufacturing there, fearing Western buyers would shun them over quality concerns.

However, GM may be setting the stage for other automakers to import Chinese-made vehicles.

China has been GM’s largest market since 2010, accounting for about one-third of global sales.

GM says it notified the United Auto Workers of its intention to import the Envisions in recent contract talks.

However, workers are unlikely to welcome any expansion of the experiment, as the U.S. market could become the dumping ground for cars when Chinese sales slow. 

Adapted from CBC News Posted: Nov 13, 2015 3:13 PM ETLast Updated: Nov 13, 2015 3:13 PM ET

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The Chatillon Car Graveyard in Southern Belgium