U.S. reviewing Venezuela's seizure of GM assets


Reuters

UPDATE 1-U.S. reviewing Venezuela's seizure of GM assets


(Adds details of auto production, dispute)
    By David Shepardson and Yeganeh TorbatiWASHINGTON, April 20 (Reuters) - U.S. officials are
reviewing Venezuela's seizure of General Motors Co's <GM.N>
assets in the country, U.S. State Department spokesman Mark
Toner said on Thursday.
    "We are reviewing the details of the case," Toner said in a
statement, saying the United States hoped to resolve the matter
"rapidly and transparently."
    GM said on Wednesday that Venezuelan authorities had taken
over its plant in the industrial hub of Valencia, adding that it
was halting operations and laying off 2,700 workers due to the
"illegal judicial seizure of its assets." [nL3N1HS1CY]
    The largest U.S. automaker vowed to "take all legal actions"
to defend its rights. The seizure comes amid a deepening
economic crisis in leftist-led Venezuela that has already roiled
many U.S. companies.
    The seizure is the result of a civil dispute with a
Venezuelan concessionaire dating back to 2000 and does not
represent a nationalization as such, according to local media
reports.
    GM, the market leader in Venezuela for 35 years, said in a
statement that in addition to the plant seizure "other assets of
the company, such as vehicles, have been illegally taken from
its facilities."
    Total auto production in  Venezuela fell to a historic low
of 2,849 cars in 2016, nearly 75 percent less than the year
before, according to Venezuela's automotive industry group.
    In the first two months of 2017, GM has not produced any
vehicles, while total Venezuelan auto production was just 240
vehicles, down 50 percent over the same period last year. The
New York Times reported the GM plant had been closed for the
last six weeks as a result of a takeover by members of one of
its unions.
    Nearly all vehicles built in Venezuela in the first two
months this year were assembled by Toyota Motor Corp <7203.T>,
which said on Thursday that its plant was operating normally.
But a spokesman added the automaker was "only producing based on
orders that come in."
    Venezuela's car industry has been hit by a lack of raw
materials stemming from complex currency controls.
    In early 2015, Ford Motor Co (F.N) wrote off its investment
in Venezuela when it took an $800 million pre-tax writedown. The
company said on Thursday it was not producing vehicles in
Venezuela.
    The South American nation's economic crisis has hurt many
other U.S. companies, including food makers and pharmaceutical
firms. A growing number are removing their Venezuelan operations
from their consolidated accounts.

 (Reporting by David Shepardson and Yeganeh Torbati in
Washington Additional reporting by Brian Ellsworth in Caracas;
Editing by Bill Trott)
 ((Yeganeh.Torbati@thomsonreuters.com; +1-202-445-7940;))

Keywords: GM VENEZUELA/USA (UPDATE 1)



This article appears in: Stocks , Technology
Referenced Symbols: 7203 , GM


More from Reuters

Subscribe






See headlines for 7203

Follow on:








Research Brokers before you trade

Want to trade FX?