VENEZUELA: Mitsubishi shuts unproductive plant
Mitsubishi Motors has shut a subsidiary's Venezuela CKD kit vehicle assembly plant after problems with worker discipline and a drop in productivity, it said in a statement.
The automaker said a "high level of absenteeism, disobedience, aggression and lawlessness of some of the workers" drove local unit MMC Automotriz to temporarily close its eastern Venezuela factory which also assembles Hyundai cars and Fuso trucks.
Productivity so far this year has averaged 33 cars a day with 1,412 workers versus 59 a day in 2004 with only 590 workers.
"Efficiency went from 74% in 2004 to 30% in 2009," the company said.
The automaker said the plant could re-open if there was a guarantee for "the safety of its workers and employees in a climate of peace and discipline".
The closure affects about 2,000 employees but the automaker said it was ready to negotiate with the labour ministry on reopening the plant.
Problems between workers and management had been going on for a "prolonged" period at the plant, according to the company, but an agreement was reached in March with ministry help.
But workers have been producing only about half of the "60 units per day, at a minimum, the union committed to produce," MMC said.
A Dow Jones report said the problems with the Mitsubishi plant were just the latest for the Venezuelan auto sector and the country's manufacturing industry in general.
Vehicle prices have soared in recent months, partly because of efforts by the government to reduce the amount of cars on the road and reverse a growing problem with heavy city traffic.
The government's efforts are also related to the fact that it wants automakers to assemble their cars in the country.
The higher prices for cars have caused a consumer backlash, which has led lawmakers to push for a bill to limit how much a vehicle could cost, which has angered dealership owners.
In addition, government restrictions on dollar sales at the official exchange rate of 2.15 bolivars to the dollar limits automakers' capacity to import parts for local assembly.
General Motors, the largest car manufacturer in Venezuela, started a three-month long production halt in June, saying it had not been allocated enough US currency to carry out day-to-day operations.
An then Venezuela's government said earlier this month it would axe a plan to import 10,000 cars from neighbouring Colombia after a dispute over Colombia's plan to allow more US soldiers to operate on its territory.
President Hugo Chavez said he would instead import the 10,000 cars from Argentina. Analysts in turn said those cars could cost more since delivery costs would rise, making the purchase of a car in Venezuela even more expensive.
As Chavez moves the country toward increased socialism, cement firms have had their local assets nationalized while steel makers, food producers and others have also been hit, Dow Jones noted.
Abelardo Daza, an economics professor at the Caracas-based IESA business school, told the news agency the root of the problems at the Mitsubishi plant are likely linked to Chavez's nationalisation push.
Union activists, he said, may choose to act in ways that hurt the management in the hopes that the company will be taken over by the government. The workers' jobs might then fall under the umbrella of the government, and thus be more protected and valuable.
"I think what we're seeing is a real deterioration in the relationship between the unions and the companies," Daza told Dow Jones.