By Mike Spector And Kejal Vyas
General Motors Co. is likely to halt vehicle production in
Venezuela this summer amid currency-exchange problems, the Detroit
auto maker said in a regulatory filing.
GM cited Venezuelan foreign-exchange regulations that make it
difficult for the auto maker's subsidiaries there to obtain U.S.
dollars, according to a filing last week. The upshot: GM could stop
vehicle production in July.
"Absent an ability to obtain U.S. dollars in the near term,
which we believe is unlikely, current vehicle production will
likely cease in July," GM said in the filing.
A GM spokesman said the auto maker's "production continues in
Venezuela and no decision has been made to cease operations. We
continue to work with the Venezuelan government to seek solutions
to convert currency."
GM makes the Chevrolet Aveo, Orlando and Cruze cars and
Chevrolet Silverado pickup truck at a factory in Valencia, the
spokesman said.
The devaluation of currency in Venezuela has bedeviled U.S. auto
makers. Ford Motor Co. earlier this year revealed it was taking a
big charge for the last three months of 2014 to remove the
country's operations from its consolidated earnings.
For more than a decade, Venezuela's government has maintained
rigid foreign-exchange controls that restrict access to hard
currency. Now, as the oil-rich country suffers from an economic
crisis and falling crude prices, it has made fewer dollars
available to the private sector, with the automotive industry
suffering one of the biggest hits.
The automotive sector suffered a 78% drop in dollar allocations
from the government to $264 million in 2014, according to Caracas
business consultancy Ecoanalitica. This year, the sector is
expected to see no more than $130 million.
Write to Mike Spector at mike.spector@wsj.com and Kejal Vyas at
kejal.vyas@wsj.com
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