Venezuela’s Chavez Threatens Toyota – Ford, Chrysler, and GM At Risk Too
Jason Lancaster | Dec 28, 2009 | Comments 3
Venezuela’s “President” Hugo Chavez is a blustering fool – despite governing a nation with one of the world’s largest reserves of petroleum, Chavez has Venezuela’s economy struggling with the highest inflation in all of South America. Chavez’s “elections” are a farce – Chavez has banned anyone from running against him, and Chavez has shut down the press so no one can undermine his authority. Under his leadership, Venezuela’s crime rate has increased dramatically, and the capital city Caracas is the “murder capital of the world.” In a word, Chavez is a failure.
Venezuelan strongman Hugo Chavez threatens Toyota with nationalization.
Recently, Chavez has turned his attention to Toyota. While it’s possible Chavez’s comments are nothing more than an effort to deflect criticism of his failed policies, it’s also possible that Chavez could nationalize Toyota’s auto operations in Venezuela. What’s more, GM, Ford, and Chrysler/Fiat also operate facilities in Venezuela, and are also at risk of losing their investments to “nationalization.”
In 2007, Chavez “nationalized” (a.k.a. stole) nearly $30 billion dollars worth of oil field investments from ExxonMobil and ConocoPhillips. Chavez claimed victory for the people of Venezuela, yet incompetent management and poor performance have lead Chavez to invite ExxonMobil and ConocoPhillips back to Venezuela earlier this year. If these oil companies (or others) decide to invest in Venezuela despite the risks, it could encourage Chavez to try the same trick with the auto industry.
There are a few signs that Chavez is planning nationalization:
- The Venezuelan auto industry is in ruins – recent auto industry labor protests are creating political pressure that Chavez may try to defuse by blaming foreign automakers.
- Chavez has nationalized many other industries over the past 2 years.
- Chavez formed a national auto company earlier this month.
Toyota must be very cautious – Chavez is willing and able to “nationalize” Toyota’s facilities in Venezuela, and the result would be a multi-million dollar loss. Toyota isn’t the only auto manufacturer with assets in Venezuela – GM, Ford, and Hyundai also operate plants in the country.
Unfortunately for GM and Ford, Chavez is an unabashed enemy of the USA. It’s unlikely that pressure from the U.S. government would help GM and Ford avoid nationalization. Indeed, the best course of action for all auto manufacturers might be to cut and run.
Let’s all cross our fingers and hope that something very, very heavy falls on Hugo Chavez. Not only is he a despot and a buffon, but he’s been linked to terrorism activity, diverting funds to terrorist organizations, and nuclear relationship with Iran.
Nothing good can come from this man.
Filed Under: Auto News
This is exactly what is wrong with car mfgs. going into places they should know they do not belong – common sense, or should I say lack thereof, is rampant among the auto industry. Just like I heard rumors GM is going to mfg. cars in China to save a buck. Hell, if that happens, I will no longer be buying a GM car or truck ever. I am sick and tired, literally, of all companies exporting cheap labor overseas to make a product and then import it back into the US and make a quick buck by selling it at a 200% profit. My company I work part time for does this same thing with their non-food side of sales. It disgusts me that 15 years ago the food side of my company was darn near 100% made in the USA and about 80% of sales. Now, the non-food side is 80% of sales and switched entirely around with everything made in China and other foreign countries. Heck, we even received last night a huge shipment of metal cans, tins, and lids made in Mexico and the packing slip/bill of lading, etc. was all written in Spanish with kilograms for weights. If I was in charge, at least require the mfg. to write the dang packing instructions in English. No one in this darn world higher up who makes these buying decisions gives a crap about the common man and their job duties as long as the company is making a quick profit on crap that sells. Everyone needs to boycott buying this crap made overseas and I really could care less if I lose my job over it that it disgusts me that much.
mk – Fair enough. The thought crossed my mind as well – it sucks that Toyota, GM, Ford, and Fiat/Chrysler will lose plants, but they’ve all known about Chavez for a long time. This isn’t exactly something that couldn’t have been predicted.
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You’re also correct in that plants built by these companies in the US or Canada wouldn’t be under threat of “natinoalization” right now. Good lesson for all of us for sure.
Mk I hate to tell you but GM is already with China. After the sale of Hummer to china now GM will be the gateway for china to sell cars here and GM to build and sell cars there.