General Motors ceased its activities in Venezuela as its assembly plant was confiscated by the government authorities. Is for a litigation initiated 17 years ago by a dealer to which GMV will rescinded the award for ‘inefficient performance’.
Lto automotive industry in Venezuela continues its decline, in the midst of an economic and social crisis that still seems to have no end. Registrations of cars in Venezuela did not stop falling, and this week there are good news coming from the caribbean island, as protests ended up claiming the lives of several people.
But what has that to do with the automotive industry the picture is not much more encouraging, since the government of Venezuela decided to seize an assembly plant that General Motors had in the city of Valencia, about 150 kilometers west of Caracas. Justice of Venezuela, proceeded to the seizure of the industrial facilities of the north-american company, due to a lawsuit that pits General Motors and one of the dealers of Chevrolet is located in the town of Maracaibo.
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General Motors had terminated the contract of concession to the petitioner 17 years ago by ‘inefficient performance’. The figure in dispute is 476.000 million bolivars, roughly equivalent to some 95 million Euros at the current exchange rate. The u.s. company reported that this number exceeds the logic for a lawsuit of that type and it would make unfeasible its operations in Venezuela on a permanent basis.
The plant of GMV (General Motors Venezuela) was taken unexpectedly by the authorities of the government, preventing the operation of these facilities that have the capacity to produce some 45,000 units per year.
in Addition, the manufacturer has reported that many assets among which there were a large number of vehicles were removed from their facilities in an illegal way by the public authorities, causing irreparable damage.
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On the road have been in addition to the there are 2,678 workers of GM, the supply chain and the 79 dealers of the brand.
In the present context, many companies were pushed to abandon or restrict its operations in Venezuela, as the government has imposed strict import restrictions and access to foreign currency, which prevents access to the raw materials needed to produce vehicles.
General Motors initiated its activities in Venezuela in the year 1948, with the first factory located in the outskirts of Caracas, becoming a pioneer in the local industry with their pick-up Chevrolet.