GM to take up to $100M charge for Venezuela
General Motors Co. said Tuesday it will take an up to $100 million charge as it deconsolidates its business in Venezuela, though the company indicated it would possibly consider relaunching some operation in Venezuela in the future.
The Detroit automaker says it has filed an appeal with the Venezuelan Supreme Court over a lawsuit that led to the seizure of its Valencia plant. If the Venezuelan Supreme Court rules in GM’s favor, it would reverse related civil and criminal actions. GM said it “expects a prompt decision and favorable outcome.”
The automaker said while it has ceased operations, GM has expressed “a willingness to talk with government officials and union leaders about the circumstances under which it could be possible to start production and employ some number of workers, with a new, viable business model.”
GM’s plant was seized on April 18 by judicial authorities. That led to GM ending operations and firing about 2,700 employees. GM has paid separation benefits to the former employees.
The automaker had not built a vehicle in the factory for more than a year. GM began operations in Venezuela in 1948 and it has been the market leader in the country for more than 35 years.
GM Chief Financial Officer Chuck Stevens on Friday indicated the company was working to regain its assets.
“We haven’t been operating in a normal fashion there for 12-18 months,” Stevens said. “We don’t necessarily want to exit the country, but certainly it’s not an environment that you can invest in or run a normal business at this point.”