General Motors will immediately cease operations in the country of Venezuela after the US automaker announced authorities there illegally seized its manufacturing plant and industrial hub.
"[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", the company said in a statement.
In recent years under President Nicolás Maduro, the government has seized bakeries amidst a bread shortage, taken over toilet paper factories amid a toilet paper shortage, and repressed the political opposition.
GM is the market leader in Venezuela, and has a strong presence in the country as well with 2,700 workers and 79 dealers who in turn employ another 3,900 people.
Venezuelan authorities unexpectedly seized a GM plant yesterday earlier this week, a trend that has been common over the past few years as the country is in political unrest.
Auto manufacturing has virtually come to a halt in Venezuela amid a broader economic collapse under Maduro.
But the move against GM, the United States' biggest automaker and one of its most recognizable brands, was a much more powerful statement, and could lead to a further erosion of relations between the two countries. The venue depends on what treaties, if any, govern the investment, he said. Like most carmakers in the oil-producing nation, it has seen production grind to a halt as the cash-strapped government chokes off its access to dollars needed to import parts and repatriate profits. But a local newspaper in Valencia, the industrial hub where the GM plant is located, said the authorities began their seizure of the plant on Tuesday and may also have frozen GM's Venezuelan bank accounts. In 2014 the government announced the "temporary" takeover of two plants belonging to US cleaning products maker Clorox Co which had left the country. "Anti-government protesters clashing in the streets with police as the country teeters on the brink both politically and economically", he continued.
The State Department said Thursday it was reviewing details of the GM case but called on authorities to act swiftly and transparently to resolve the dispute. The statement said a fair judicial system is critical to economic reforms that would restore growth, but it made no mention of any action the USA government might take.
In 2007, Exxon made a decision to cease operations in Venezuela after then-President Chavez tried to nationalize some of its assets there.
Juan Carlos Hernandez reported from Valencia and Joshua Goodman reported from Caracas.