General Motors To Reopen Venezuela Plant
CARACAS, Venezuela (AP) -- General Motors Co.'s Venezuela affiliate announced plans Wednesday to reopen a car assembly plant that has been closed for almost three months.
GM's president in Venezuela, Ronaldo Znidarsis, said General Motors plans to restart production at its plant in Carabobo state because President Hugo Chavez's government has agreed to sell the company the U.S. dollars it needs to import car parts.
GM halted operations at the plant in June, saying the company had accumulated some $1.15 billion in debts to foreign providers. Znidarsis told The Associated Press the company is still struggling with what he called "significant" debts, but he said GM received assurance from the government that it would receive enough hard currency in coming months to reduce them.
"We are working with the government for a plan to continue reducing what's left," he said.
Znidarsis said GM plans restart the plant next week with 1,700 of the plant's 2,900 employees. The company must determine how far it can boost production before deciding to bring all its workers back, he said.
"We are going to begin the operation with a single work shift," he said. "Before deciding the people's fate, we must know what level of production we'll have."
Under currency controls imposed Chavez in 2003, Venezuelans must apply to a government agency for dollars to import goods. Lower prices for oil -- Venezuela's main export -- have forced Venezuela's government to ration U.S. dollars in recent years, prompting complaints from automakers of growing debts with providers.
GM -- Venezuela's largest automaker -- controls 53.6 percent of the local market, according to the Venezuelan Automobile Chamber. Car sales have dropped 30 percent during the first five months of 2009 compared to same period last year, according to the chamber.
GM's plant assembled 29,007 vehicles during the first five months of this year, compared to a total of 29,207 vehicles during the same period last year.