Venezuelan officials denied on Thursday that the government expropriated a General Motors factory this week after complaints from the Detroit-based company over the “illegal judicial seizure of its assets.”
GM's claims that the government acted unlawfully echoed through English-language mass media this week, accompanied by calls for U.S. President Donald Trump to up the economic pressure on the socialist state.
While stopping short of outright expropriation and nationalization, the government has temporarily frozen the assets of the U.S. multinational due to its failure to honor agreements both with its employees and with local business partners. The plant has been embroiled in labor unrest in recent years, with workers long complaining of unfair treatment and a disinterest from management in restarting production.
Additionally, the legal basis for the asset freeze comes from the auto manufacturer's refusal to pay US$665 million in damages to a former GM car dealership in a lawsuit from the year 2000.
Following the order to freeze GM assets until it fulfills its obligations under Venezuelan law, the company announced that all operations in the country would be halted, essentially putting the company's 2,678 workers out of work.
Workers from the Union of Socialist Winners and the Workers' Union of GMV held a meeting with government officials to discuss the move and to ensure that production continues at the facility. The meeting was followed by tweets from Venezuelan Minister of the Economy Ramon Lobo stating, "We didn't expropriate!"
On Thursday, Enrique Tahan, the head of GM's corporate and government relations in the country, told The New York Times that the plant has been plagued by an “aggressive takeover” by workers. When factory managers asked the government to retake the facility from the workers, authorities instead placed the plant under national control.
Tahan complained that managers are now barred from the premises, yet union workers are freely allowed access to the plant.
GM spokesperson Dayna Hart also admitted to the New York Times that the plant had been unproductive for a prolonged period of time, an illegal move in a country where wealthy employers are often accused of intentionally reducing production.
Last November, union leaders blasted company management for failing to use the factory to assemble vehicles, instead using the facilities as a front – or “briefcase company” only existing on paper – for the purpose of reselling spare parts. Worker representatives called for the takeover of the plant by workers, appealing to authorities – including the Bolivarian National Armed Forces – to accompany them until the production of vehicles for the Venezuelan people was restarted.
U.S.-based media outlets have used the dispute as another way to increase pressure on the Venezuelan government, raising alarm bells about the "risks" of doing business in the country and implying that all foreigners doing business in the country face the threat of expropriation.
“It fits a broader pattern, in the sense that the government's response to surges in opposition activity tends to be the deepening of the revolution,” Phil Gunson of International Crisis Group told The Washington Post. Gunson's nongovernmental organization is directly funded by the U.S. government, Open Society Foundations, Carnegie Corporation and Rockefeller Brothers Fund, among others.
“There are those at the top, including Maduro himself, who appear genuinely to believe that this is a revolution and the ultimate goal is the replacement of the capitalist economy with one that is entirely state-run,” the Washington-sponsored analyst continued.
Nevertheless, the country's socialist authorities have in the past pledged to take over foreign-owned facilities that fail to operate in the face of sabotage efforts against the Venezuelan economy.
“A stopped company (is) a company recovered for the working class and the revolution, I won't hesitate with respect to that, I will not accept any kind of conspiracy,” Maduro said during a nationwide address last October. “People here have a need to work and produce and we will not allow a Yankee model of destabilization to install itself here in Venezuela,” he added.
The GM dispute comes amid large, violent opposition protests and unprecedented “regime change” efforts by Washington. Deadly protests declared by right-wing opposition leaders dubbed “coup plotters” by Venezuelan President Nicolas Maduro continue to rock the country, claiming multiple lives and exacerbating the country's economic crisis.