Venezuela Seizes General Motors Car Plant
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 carmaker 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 carmaker 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 carmaker 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 writedown. 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.
Deaths and injuries reported amid ‘mother of all marches’ in Venezuela
17-year-old boy fatally shot along with woman and National Guardsman as the opposition calls for another mass protest on Thursday.
At least three people have been killed and dozens injured in Venezuela as street battles erupted alongside a mass anti-government demonstration that the opposition billed as “the mother of all marches”.
A 17-year-old boy was fatally shot in the head in a neighbourhood of Caracas, while several hours later a woman was killed in gunfire during a rally in the Andean state of Tachira near the Colombian border.
At least one legislator had to be hospitalised, and images posted online showed opposition leader and former presidential candidate Henrique Capriles choking on teargas.
As night fell, a few thousand people were still gathered in a plaza in wealthy eastern Caracas as residents in nearby buildings banged pots and pans in a show of support. A group of youths with their faces covered tore down street signs and billboards for makeshift barricades. They then launched rocks and Molotov cocktails against lines of police and national guardsmen who responded with tear gas in cat-and-mouse skirmishes.
The opposition called for another protest on Thursday, raising the specter of prolonged disruption in the country.
“Same place, same time,” said Capriles on Wednesday night. “If we were millions today, tomorrow we’ll be more.”
Fears of bloodshed had been stoked after President Nicolás Maduro put troops on the streets, supplied guns to sympathetic civil militias and called for a simultaneous rally of his supporters against what he said was a United States-backed coup.
The first victim on Wednesday, Carlos Moreno, was not taking part in the demonstration but was shot when government supporters approached an opposition gathering and opened fire, witnesses told Reuters. Moreno, who was three days from his 18th birthday, was shot in the head, and later died in the hospital.
Hours later, university student Paola Ramírez died in the opposition stronghold of San Cristóbal, after she and her boyfriend, were shot at by a group of men as they left a protest.
“We were on a motorbike and they were following us, shooting,” her boyfriend told Reuters. “I left her on a block where she was going to find her sister and I went to hide the bike. I heard shots and when I arrived she was on the ground. I tried to protect her as much as I could,” he said.
A National Guard sergeant was later killed by a sniper, the human rights ombudsman Tarek Saab tweeted on Wednesday night.
State TV images showed red-shirted government loyalists on the rival march “to defend the homeland”.
But their numbers were far exceeded by the tens of thousands who joined protests across Venezuela to express their anger and frustration at an administration that has led the country with the planet’s biggest oil supplies into the world’s deepest economic recession.
Banners reading “No more dictatorship” highlighted the steady erosion of democracy. In the past month, the supreme court attempted to circumvent Congress’s legislative powers – a power grab which was subsequently reversed, while opposition figurehead Capriles was banned from running for office for 15 years.
Many targeted the Venezuelan president, who is blamed for high inflation and the chronic shortages of food, medicine and other basic goods. The chant “Esta es la ruta para salir del hijueputa” (“This is the way to oust the son of a bitch”) echoed repeatedly around the downtown district.
The protesters came from all walks of life. Some said they had previously supported the government under Maduro’s predecessor, Hugo Chávez, but the worsening economic and social crisis had made them march for change.
“We are desperate and tired of living in misery,” said Kelvyn Cava, a former Chavista from the eastern state of Zulia. “With Chávez our salaries were worth something. Now, if hunger doesn’t kill us, then crime will.”
A group of Catholic clergy were also among the crowd, although the Vatican has tried to adopt a neutral position in hosting talks between the two sides.
“I came with several priests because we have reached the breaking point for this regime of narcotraffickers and terrorists. We need peace and to reconstruct this country,” said Father José Palmar.
“We ask Pope Francis to do for Venezuela what Pope John Paul II did for Poland,” he add, referring to the role that the Catholic church played in overthrowing communism in eastern Europe during the Soviet era.
Others said they were prepared for clashes with the security forces. “We have come today because we want freedom and a functional economy. It’s paralysed,” said Luis Machado, a money changer who was wearing gloves in case he had to pick up a gas canister and throw it back at the security forces.
Foro Penal, an NGO that tracks human rights abuses, said that at least 24 people had been detained in connection with the demonstration.
This was echoed by the United States, which issued a communique on Tuesday warning that “those responsible for the criminal repression of peaceful democracy institutions and practices, and for gross violations of human rights, will be held individually accountable for their actions by the Venezuelan people and their institutions, as well as by the international community”.
Maduro responded in a live televised address on Tuesday night in which he claimed, “The US government, the state department, have given the green light, the approval for a coup process to intervene in Venezuela.”
He then signed a decree to mobilise the military to defend internal order. The government has also tried to reduce the size of protests by cutting subway services and setting up highway roadblocks.
For seasoned observers of Venezuelan politics, this may sound familiar. In the 18 years since the late Hugo Chávez, and his successor Maduro assumed power, Venezuelans have grown accustomed to giant rallies for and against the government.
Several have turned violent, but none have spurred significant change. Although the opposition seized control of Congress in the 2015 election, they are divided and have failed to galvanise popular discontent.
But there are differences from the past. The economy is deteriorating, with the IMF predicting this week that Venezuelan unemployment will surpass 25% this year as the country suffers a third year of recession. There is also less regional support for Maduro following the rightward shift of governments in Argentina and Brazil.
The mood is becoming more confrontational.
Whereas in previous marches people wore white shirts and baseball caps with Venezuela’s tricolor flag, this time protesters on the frontline hid their identity behind masks and hoodies. Banners and flags have given way to slingshots and rocks.
Even Maduro was recently pelted with objects in the eastern city of San Félix, traditionally a bastion of government support.
On Wednesday, the president addressed a red-shirted crowd of supporters in Caracas, saying that a “corrupt and interventionist right wing” had been defeated.
“Today the people stood by Maduro!” the president said, who claimed that more than 30 “terrorists” had been arrested. “We’ve triumphed again! Here we are, governing, governing, governing with the people!” he added, before breaking into song.
Shortages of food, medicine and other basics have eroded support for the government in poor neighbourhoods. According to the Observatory of Social Conflict, there were close to 5,000 incidents of protests in 2016 – 15% more than in the previous year.
“This is no longer people chanting and taking selfies. People are indignant – and they are resolute,” Capriles said.
Sources: The Guardian and ZeroHedge