GM Announces Deconsolidation of Venezuelan Business
DETROIT – 2017-05-02 – General Motors Co. (NYSE: GM) today announced the deconsolidation of its business in Venezuela, effective as of May 1, 2017.
The deconsolidation follows the unexpected seizure of GM’s Venezuelan plant on April 18 by judicial authorities, which forced the company to cease operations and terminate employment relationships due to causes beyond the parties’ will. All former employees have since been paid separation benefits as legally required.
Last week, GM filed an appeal with the Venezuelan Supreme Court, which, if successful, would dismiss the underlying lawsuit that led to the seizure, and reverse all related civil and criminal actions. The company expects a prompt decision and favorable outcome.
While the company has ceased operations, GM executives have 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.
The deconsolidation is expected to result in a charge of up to approximately $100 million.
SOURCE: General Motors