General Motors, the largest US automaker and the third biggest in the world, is currently considering to cease production operations in Venezuela in July – with the automaker joining other corporations in a drive to stop losses in the country.
The South American member of the OPEC community has had an utterly volatile currency strategy, which has brought numerous losses to global corporations that were involved in local production – the companies are taking action to shield their financial results from the deteriorating conditions in Venezuela. The US automaker currently has one production facility in the country, in Valencia, where it manufactures the Chevrolet Aveo small and Cruze compact passenger vehicles, the Orlando crossover and the Silverado pickup truck. The company’s employee tally in Venezuela is of around 3,000 persons. Venezuela’s current currency control system has brought a shortage of dollars in the country, triggering massive consumer product shortages and deeply affecting automakers that have local production facilities – they have been unable to pay for imported parts and thus continuously reduced their production quotas. GM has so far laid off 446 workers and US rival Ford is also ready to fire 267 workers, according to union officials.
General Motors announced last week in a US filling with a regulator that faced with the impossibility to obtain US dollars in Venezuela will most likely lead to a cease of operations at its production facility there. “Absent an ability to obtain U.S. dollars in the near term, which we believe is unlikely, current vehicle production will likely cease in July 2015,” commented the company in a filling with the U.S. Securities and Exchange Commission.