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April 20, 2017

Venezuela seizes GM factory

General Motors reportedly said Venezuelan authorities had illegally seized its factory in the industrial hub of Valencia and vowed to "take all legal actions" to defend its rights.

General Motors reportedly said Venezuelan authorities had illegally seized its factory in the industrial hub of Valencia and vowed to "take all legal actions" to defend its rights.

The seizure comes amid a deepening economic crisis in leftist-led Venezuela that has already roiled many US companies, a Reuters report said.

"Yesterday, GMV's (General Motors Venezolana) plant was unexpectedly taken by the public authorities, preventing normal operations. In addition, other assets of the company, such as vehicles, have been illegally taken from its facilities," the company said in a statement cited by the news agency.

It said the seizure would cause irreparable damage to the company, its 2,678 workers, its 79 dealers and to its suppliers.

Venezuela's Information Ministry did not immediately respond to a Reuters request for information.

Reuters noted Venezuela's car industry has been in freefall, hit by a lack of raw materials stemming from complex currency controls and stagnant local production, and many plants are barely producing at all.

In early 2015, Ford wrote off its investment in Venezuela when it took an US$800m pre-tax writedown.

Reuters said Venezuela's government has taken over factories in the past. In 2014 the government announced the "temporary" takeover of two plants belonging to US cleaning products maker Clorox Co which had left the country.

Venezuela faces around 20 arbitration cases over nationalisations under late leader Hugo Chavez.

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