GM to take $600M 2Q charge for Venezuela operations
General Motors Co. said Thursday it expects to take a $600 million special item charge against second quarter earnings as it further devalues its Venezuela operations.
The automaker, in a call with analysts and investors, said the charge stems from changing the way it determines the exchange rate in Venezuela amid current economic conditions in the South American country.
“Despite the significant challenges in Venezuela, this market continues to be very important to us,” said Tom Timko, GM vice president, controller and chief accounting officer.
GM also took special charges and devalued its Venezuelan operations in 2013 and 2014.
“We do not expect this decision to have an impact on our Venezuela or South American operating results, nor do we believe it will affect our 2015 free cash flows,” Timko said.
Timko said GM will continue producing vehicles in the country through the end of July and hopes to beyond that.
“We’re actively negotiating with the government to try to continue our production,” he said.
GM stock was trading down slightly Thursday morning at about $35.08 a share.