The Venezuelan unit of GM has axed 13 percent of its workforce as the company struggles to get currency to pay its external suppliers.
The Venezuelan government, led by President Nicolás Maduro, operates currency exchange controls, which can sometimes make it tough for importers to scratch together enough cash to pay suppliers.
The government has now reduced those dollar amounts due to Venezuela’s tumbling oil prices and fluctuating currency, which has left the auto industry and other importers in a bind.
As a result, auto manufactures like GM have been forced to lay off workers, while others like Ford have halted production lines for two weeks and also eye cuts to its work force.
“Two weeks ago, 446 General Motors workers were dismissed,” Christian Pereira, president of the federation of unions that represents auto workers, told Reuters in a telephone interview. “The company said production is slowing and auto parts for assembly are nearly impossible to obtain.”
To put it bluntly, the country’s entire auto industry is at risk.
Car production last year fell 72 percent to under 20,000 units. Meanwhile, the country churned out nearly 160,000 units back in 2007.