All is not well in Venezuela, the country is in full on economic crisis mode. Their economy shrunk by nearly 18% in 2016 which marked the 3rd consecutive year of recession. Hyperinflation has significantly devalued the blolivar causing the cost of consumer based goods to increase at an alarming rate.
The problem seems to stem from large portions of the Venezuelan being nationalized. This was a practice started by Hugo Chavez and has been continued by his hand-picked successor, Nicolas Maduro. Maduro has continued to nationalize industries such as private oil, telecommunications, energy and apparently the cement businesses. Wasn’t aware the cement business was worth nationalizing but never the less it is in Venezuela.
The political opposition is led Henrique Capriles and in any logical and rational country his voice would be allowed to be heard. Unfortunately for Venezuela Maduro’s administration has barred Capriles from holding political office for the next 15 years. Which makes sense, in a greedy dictator kind of way.
The unrest has even made its way to the automotive industry. General Motors and their Venezuelan subsidiary General Motors Venezolana have operated in Venezuela for nearly 70 years. GM has announced that they will immediately cease operations in Venezuela after its production plant was unexpectedly seized by the Venezuelan government.
“[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 said in a statement.
In addition to their plant GM has 79 dealerships in Venezuela and employs nearly 2,700 people. These people who now find themselves with an uncertain employment future. Given the current unemployment rate is 25% in Venezuela GM saw it prudent to provide “separation payments” to its employees.
No reason for the seizure has been given and the Venezuelan government has declined to comment on the matter.