This past April, General Motors was faced with bad news: its manufacturing plant in Venezuela had been seized by the country. GM quickly called the move “illegal” and vowed to take action to defend its rights.
So, what led to the seizure? Reuters took a deep dive into the history of GM Venezuela and two car dealers who ultimately made it happen. Kaled Kansao, the owner of two long-defunct GM dealerships, has been behind an ongoing legal battle with GM over stripped franchise rights.
GM maintains Kansao and his business partner failed to meet a monthly sales quota of 25 vehicles per month in the country, thus, the franchise agreement was terminated. The plant’s seizure was ultimately encouraged through private citizens, and not government authorities after Kansao’s lawsuit swayed the courts into slapping GM with fees, settlements, and what it called “absurd irregularities.”
The lawsuit also ordered GM to pay an “occupation fee” at its own facility while the seized plant was to be auctioned off by the government.
Venezuela has spiraled into political and economic turmoil and remains an unstable place to do business. GM previously went on the record to state it hopes it can return to the country, but without sound legal support, anything is up for grabs. Following the plant’s seizure, GM terminated its entire workforce.