Detroit automakers unable to produce cars in Venezuela image

General Motors has ordered its Venezuelan unit to let go of 13 percent of its workers, while the local Ford Motor factory has been forced to cease operations, according to a union official.

Both Detroit automakers were unable to complete their business tasks in Venezuela because of the ongoing lack of hard currency – which impedes day to day operations because the automakers are unable to purchase the needed parts to produce the cars. The OPEC member has an unusual currency control system that has burned through dollar reserves as the global oil prices continue to post record lows, which has heavily impacted in turn numerous industries, including the automotive sector – the companies have been forced repeatedly to cease production because of a lack of import parts that can’t be acquired because they don’t have enough currency. “Two weeks ago, 446 General Motors workers were dismissed,” Christian Pereira, president of the federation of autoworker unions. “The company said production is slowing and auto parts for assembly are nearly impossible to obtain.”

The auto union leader added that Ford’s assembly facility has ceased operations for two weeks because of the same reason, also mulling the axing of 267 worker positions.The official added the situation with the two Detroit automakers is similar to the one eoncountered by several other international companies – Fiat, Toyota, Mitsubishi, Iveco or Mack. During the first three months of th eyear, auto assembly in Venezuela slid 79 percent compared to the first quarter of last year, with only 3,408 vehicles produced during the period.

Via Reuters