General Motors exits Venezuela plant seizure

General Motors has become the latest multinational to exit Venezuela after it said its plant in the country was illegally seized by the government this week.

In a statement released yesterday, GM said its factory had been ''unexpectedly taken by the public authorities, preventing normal operation.'' It added, its vehicles were also seized, and vowed to take legal action as political and economic crisis spread in the oil-rich South American nation.

The car manufacturer is among an increasing number of international firms to report major problems in Venezuela. The South American country has recently been hit by food scarcities, soaring inflation and street protests calling for the removal of president Nicolas Maduro and his leftist government.

Production has plummeted in the manufacturing sectors due to a currency crisis that saw inflation reach an annual rate of 455 per cent in February.

General Motors became the latest company to have a factory and other asset seized by the government of Venezuela, and according to commentators, the Detroit automaker faced an uphill battle for damages recovery.

The actions comes as latest in a series of government confiscations of factories and other assets under the so-called 21st century socialist revolution in Venezuela started by the late Hugo Chavez two decades ago. Venezuela is currently fighting claims of illegal asset seizures at a World Bank-sponsored arbitration panel from over 25 companies.

According to commentators, though the company has said it would defend itself legally, getting compensated could be extremely difficult. Exxon Mobil too had had its assets seized under Hugo Chavez. The oil giant sought compensation of $16.6 billion and the company went to win a $1.4 billion judgment, but earlier this year the arbitration panel determined that Venezuela had to pay only $180 million.

GM could seek compensation and damages for its lost plant in several different international venues, AP reported quoting Nigel Blackaby, a lawyer at the Freshfields Bruckhaus Deringer law firm, which had battled Venezuela in several high-profile cases in international courts.