GM halts operations in Venezuela after factory is seized

Danny Woods
April 21, 2017

Anti-government demonstrators take cover from advancing Bolivarian Police officers during protests in Caracas, Venezuela, Wednesday, April 19, 2017.

"The opposition is trying to provoke a conflict but they aren't going to achieve their goal", said Marquez, wearing a shirt emblazoned with the eyes of Hugo Chavez, the country's deceased former president who is a symbol of revolutionary zeal throughout Venezuela.

Anti-government protesters march along a highway in Caracas on April 19, 2017. Tens of thousands of opponents of President Nicolas Maduro flooded the streets of Ca. Tens of thousands of opponents of President Nicolas Maduro flooded the streets of vehicle.

GM said Thursday that its only factory in Venezuela was confiscated a day earlier, as anti-government protesters clashed with authorities in a country that is roiled by economic troubles.

In three weeks of unrest, seven protesters have been killed and hundreds have been jailed.

The seizure arose from an nearly 20-year-old lawsuit brought by a former GM dealership in western Venezuela.

"We are concerned about the latest developments in Venezuela and urge that all efforts be made to lower tensions and prevent further clashes", a spokesman for U.N. Secretary-General Antonio Guterres said in a statement on Thursday. GM called it an illegal judicial seizure of its assets.

GM has about 2,700 workers in the troubled country, where it's been the market leader for over 35 years.

Opposition supporters protested in Caracas and other cities in what they called "the mother of all marches", denouncing the unpopular leftist President Nicolas Maduro for eroding democracy and plunging the oil-rich economy into chaos.

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In July of past year, the Venezuelan government took control of a factory belonging to Kimberly-Clark Corp. after the USA personal care giant said it was no longer possible to manufacture in the crisis-wracked nation due to a lack of materials.

"This is a test case for Trump", said Raul Gallegos, a Bogota-based analyst at Control Risks consultancy.

Records from Trump's inaugural committee released Wednesday show that Citgo Petroleum, a USA affiliate of Venezuela's state oil company PDVSA, was one of the biggest corporate donors to the swearing-in ceremony. The government has repeatedly blocked any attempts by the opposition to oust Maduro by a referendum vote. Pro-government militias were blamed for two deaths, including that of a teenager in Caracas who was heading to a soccer game with friends.

An hour into the march in Caracas, a 17-year-old boy was shot in the head, according to the Venezuela's public ministry, which said it had started investigating the incident. "Everyone is out of danger", Muchaco said on his Twitter account. "That's how this criminal dictatorship works".

GM can seek compensation and damages for its lost plant in several different worldwide venues, said Nigel Blackaby, a lawyer at the Freshfields Bruckhaus Deringer law firm, which has battled Venezuela in several high-profile cases in global courts.

The Supreme Court's decision has energized Venezuela's fractious opposition, which had been struggling to channel growing disgust with Maduro over widespread food shortages, triple-digit inflation and rampant crime.

Opposition leaders have called for the National Assembly's powers to be fully restored, for all political prisoners to be freed, for a humanitarian corridor to be opened and for stalled elections to take place. By doing away with the opposition-controlled legislative branch, the move effectively meant the remaining two branches of Venezuelan government were controlled by Maduro's ruling United Socialist Party.

But the government hasn't backed down.

The mayor of the municipality of Chacao, in Caracas, said that the hospitals in his jurisdiction are taking care of 57 people “from the demonstration, ” who tried unsuccessfully to reach the Ombudsmans Office in the center of the Venezuelan capital.

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