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General Motors will immediately cease operations in the country of Venezuela after the U.S. automaker announced authorities there illegally seized its manufacturing plant and industrial hub. The hub, situated in Valencia, employs 2,678 workers.
“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. GM went on to call the actions an "illegal judicial seizure of its assets."
Venezuela remains in a deep state of economic crisis marked by protests as currency controls take effect and its raw material resources continue to dwindle. Large portions of the Venezuelan economy have been nationalized since 1999. According to CNN, the country's economy shrank by 18 percent in 2016 and the unemployment rate hovers around 25 percent.
Other automakers have struggled in the country as it has become more difficult to access U.S. dollars and import essential mechanical parts. Ford wrote off its entire investment in Venezuela in 2015 by taking an $800 million pre-tax write-off.
As of now, there seems to be no motive as to why authorities seized GM's operations. The automaker forecasts irreversible damage from the incident and expects its suppliers and 79 local dealers to see severe effects.