Goodyear Shutters Venezuela Plant, Gives Out Tires As Severance

[Swordsmyth]

Venezuela's economic depression has claimed yet another victim, as Goodyear Tire announced it would shutter its Venezuela operations and lay off its entire local workforce, the latest foreign corporation to close shop in the crisis-torn county. On Monday, employees arrived at the company’s lone plant in the industrial city of Valencia to find it closed with a letter posted on the door. “Goodyear Venezuela has been forced to cease operations,” according to a copy seen by Bloomberg.

The departure of foreign companies from Venezuela is hardly surprising: in fact, it is remarkable that Goodyear manages to last as long as it did. What was more notable was how the company said goodbye to its employees one last time. According to Eduar Bremo, a member of Goodyear’s factory-workers union, the company is not only paying (token) severance packages to its more than 1,200 employees but is also giving each 10 tires, which have become hugely valuable in the shortage-wracked socialist paradise. According to Bremo, the plant produced some 1,000 tires a day, but a lack of materials and soaring costs forced it to shut its doors.
Years of economic depression and a hostile government have forced companies such as Kellogg and Kimberly-Clark to abandon Venezuela as hyperinflation rendered most of their business conducted in local currency unsustainable.
Other companies have slashed their work forces and limited their product offerings as they hold out for better days. Last week, Ford Motor began offering its employees buyouts as it further scaled back its remaining Venezuela operations. It was unclear if Ford would give out cars as a parting gift to its local employees.



https://www.zerohedge.com/news/2018-...ires-severance

[axiomata]

At least they got something valuable as severence.

[goldenequity]

shame on Zerohedge. spit.
this is geopolitic driven unilateralist/western sabotage and economic terrorism. period.
This is a policy driven assault.

You think if US sanction/blackmail can force a global corp like French energy giant Total
to give up it's holding and 50% share of the largest gas reserve on Earth off the coast of Iran
that they cannot do EXACTLY the same...
and force a podunck tire plant in Venezuela to 'shutter' and effect more misery and more blackmail against another 'enemy government'???

This is a bull$#@! article/hit piece scapegoating 'socialism' as a convenient whipping boy
and making a 'hero' out of Goodyear cuz it 'tried so hard' but 'finally lost the battle' against the boogie man.
utter bull$#@!.

[angelatc]

shame on Zerohedge. spit.
this is geopolitic driven unilateralist/western sabotage and economic terrorism. period.

Didn't expect this from you. You think that Venezuela is failing because "the west" sabotaged it?
Yeah, no. This is just another failed banana republic crushing itself under its own weight.

[juleswin]

shame on Zerohedge. spit.
this is geopolitic driven unilateralist/western sabotage and economic terrorism. period.
This is a policy driven assault.

You think if US sanction/blackmail can force a global corp like French energy giant Total
to give up it's holding and 50% share of the largest gas reserve on Earth off the coast of Iran
that they cannot do EXACTLY the same...
and force a podunck tire plant in Venezuela to 'shutter' and effect more misery and more blackmail against another 'enemy government'???

This is a bull$#@! article/hit piece scapegoating 'socialism' as a convenient whipping boy
and making a 'hero' out of Goodyear cuz it 'tried so hard' but 'finally lost the battle' against the boogie man.
utter bull$#@!.

I realized when news of the country running out of toilet paper and hungry people burning food warehouses that this is more than just a country with a mixed economy having an economic downturn. The west wants Venezuela and they will try every trick in the book to get it, I just hope that the govt with their people be resilient enough to weather this onslaught cos the pressure can't last forever.

Also some people do not understand the effect to an economy of the prospect of the US military invasion. It would not just stress the country to overspend on defense but it drys up any foreign investments people might want to make. I don't trust Putin as I used to but it seems like they have sent in some military help to Venezuela and I really hope that helps them ward off outside interference.

You must spread some Reputation around before giving it to goldenequity again.

[presence]

Venezuelan government takes over Goodyear plant

Date created : 11/12/2018 - 19:05

Caracas (AFP)
The Venezuelan government took control Tuesday of installations owned by Goodyear,
a day after the US tire-maker closed its operations in the crisis-torn South American country.

In a statement read on state VTV television, the government said it had taken all necessary steps to reestablish production at the Goodyear plant in the industrial city of Valencia.

Goodyear abruptly closed the plant on Monday, announcing the decision in a statement posted on the factory gate that said the company had been

"forced to cease operations."

Venezuela has been in an accelerating economic free-fall under President Nicolas Maduro, beset by hyperinflation and shortages that have driven hundreds of thousands of people to leave the country.

The government said it was taking over the Goodyear plant to protect its 1,160 workers and asked the attorney general's office to launch a criminal investigation into "this act of sabotage and boycott."

The company said it has paid its workers' salaries and benefits, and would make an "additional extraordinary" payment in the coming days, and allow workers to have 10 tires apiece.

The factory was operating at barely 20 percent of capacity, producing 10,500 tires a day, according to union leaders.

The government characterized Goodyear's decision as part of an "escalation of attacks" against economic reforms launched by Maduro in August.

The plant closing is part of "a file of destabilization and continuous aggressions that the United States promotes against Venezuela," it said.

The government has so far been unable to halt a spiral of shortages and raging hyperinflation that the International Monetary Fund has estimated will reach 10 million percent in 2019.

Shortages of parts and tires, combined with high prices, have resulted in the grounding of 90 percent of Venezuela's public transportation fleet.
The government has moved to take over the holdings of other foreign companies that have halted operations.

In August, it took similar action when tire-maker Pirelli closed its plant for lack of raw materials after 28 years in the country.

https://www.france24.com/en/20181211...goodyear-plant

Venezuela crisis: Goodyear staff get '10 tyre' severance

• 10 December 2018

Quality tyres are valuable on the black market, in a country where there is a chronic shortage of all sorts of goods.

A number of foreign firms have pulled out of Venezuela,
citing a growing economic crisis and
US sanctions.

President Nicolás Maduro has accused his opponents and the US of waging an "economic war" on his government.

In a statement on Monday, Goodyear said that it "has made the difficult decision to stop producing tyres" in Venezuela, Reuters news agency reports.

"Our goal had been to maintain its operations, but economic conditions and US sanctions have made this impossible."
The company said it was in the process of making severance payments, which included giving each employee 10 tyres.
Goodyear is the latest multinational to leave Venezuela, following Kellogg, Kimberley Clark and several airlines.
Venezuela has been in a dire economic crisis since 2014.

An estimated 2.3 million citizens have fled hyperinflation, power cuts, and food and medicine shortages.

Over the past two years, the US administration of President Donald Trump has imposed sanctions on dozens of Venezuelans, including top officials.
Washington accuses them of corruption, drug trafficking and human rights abuses - a claim they deny.

https://www.bbc.com/news/world-latin-america-46513571

OPINION & ANALYSISECONOMYTrump’s Economic Sanctions Have Cost Venezuela About $6bn Since August 2017

Emersberger analyses the recent article by government critic Francisco Rodriguez, in which Rodriguez admits that US sanctions are "misguided" and have a damaging effect on the Venezuelan people in general.

By Joe Emersberger – Joe Emersberger
Sep 27th 2018 at 11.24am

The following piece by Canadian political analyst Joe Emersberger was written in response to a recent article by Torino Capital Chief Economist Francisco Rodriguez.

Rodriguez is well-known as an outspoken critic of the Maduro government, but in his recent article he recognizes that Washington’s “misguided” sanctions are exacerbating falling oil production in Venezuela and as such, pejoratively affectinggeneral living standards.

The resulting loss of access to credit appears to have helped precipitate the collapse in oil output, driving the resulting economic contraction.

Our point is that the spilling over of this political crisis into the arena of finance had consequences for the country’s economy and for the living standards of Venezuelans,

Despite problematic comparisons between Venezuela and Iraq and Syria and charged anti-government rhetoric, Rodriguez presents a coherent economic argument against US sanctions which, amongst other things, block international payments.

I argue that Venezuela’s economy has imploded because it can’t import.

...it should be noted here that 90% of rubber comes from southeast asia:
http://www.worldstopexports.com/natu...ports-country/

Finally, Rodriguez deconstructs Washington’s argument that the sanctions only impact high-ranking figures in the Venezuelan government, claiming that:

Advocates of sanctions on Venezuela claim that these target the Maduro regime but do not affect the Venezuelan people. If the sanctions regime can be linked to the deterioration of the country’s export capacity and to its consequent import and growth collapse, then this claim is clearly wrong.

Venezuelanalysis team.

---

Venezuelan economist Francisco Rodriguez, a longtime critic of the Venezuelan government, wrote a piece showing that after sanctions Trump introduced in August of 2017 Venezuela’s oil production dropped much faster than analysts had predicted it would. Rodriguez was the economic advisor to former presidential candidate Henri Falcon, who defied US threatsto run in Venezuela’s presidential elections that were held in May despite the boycott of other opposition leaders.
Below is the key graph Rodriguez provides.

Venezuelan and Colombian oil prices (OPEC)







Venezuelan oil production followed essentially the same pattern as Colombia’s during 2016 and most of 2017

–until August when Trump’s sanctions came into force.

A decline in production was driven by the price of oil hitting its lowest point in about a decade at the start of 2016. But in August of 2017 Trump’s sanctions made it illegal for the Venezuelan government to obtain financing from the US which was devastating for two reasons: all the Venezuelan governments’ outstanding foreign currency bonds are governed under New York state law; and one of the Venezuelan government’s major assets, the state-owned CITGO corporation, is based in Texas. The sanctions also blocked CITGO from sending profits and dividends back to Venezuela (which had been averaging about $1 billion USD per year since 2015).

The table below shows my estimate of Venezuela’s oil revenues each month since Trump’s sanctions came into force. The price of WTI oil (which approximates the price of Venezuela’s) basically increased linearly since August of 2017 from $50 to about $70 per barrel. The oil production volumes are taken from the estimates Rodriguez has provided. In the “no sanctions” case show below, it is assumed that Venezuela‘s oil production would have continued to fall at the same rate as in the 12 months before Trump’s sanctions. Rodriguez cited a “worst case” prediction made by a prominent oil consultant that a 13% decline in production would take place in 2017 followed by a 6% decline in 2018. The “no sanctions” case shown below is close to that “worst case prediction”. It assumes an 11% decline would have taken place. In reality (i.e. the “sanctions” case) production has fallen by 37% since the sanctions were imposed. The difference in total revenue between the “sanction” and “no sanctions” case over the twelve month period is about $6 billion.
table.png

Venezuelan oil revenues with and without the impact of sanctions (Joe Emersberger)


That sum, $6 billion, is 133 times larger than what the UNHCR has appealedfor in aid for Venezuelan migrants. It is also equal to about 6% of Venezuela’s GDP at present. Health care spending in Latin America and the Caribbean averages about 7% of GDP.

Perversely, Maduro’s government has been widely accused of “using” the economic crisis to “buy” loyalty of the most vulnerable through the direct delivery of food and other basic products. Trump’s goal is clearly to starve the government of funds it uses to allegedly “buy support” (i.e. respond to the crisis). Rodriguez pulls his punches and heavily qualifies his thesis, but the inescapable conclusion is that Trump’s policy is depraved.

The US has deliberately
made an economic catastrophe much worse
in the hope that its Venezuelan allies
can seize power through violence

as they briefly did in April of 2002.

Rodriguez is correct to say that the “toxification” of dealing with Venezuela’s government, and the imposition of “reputational costs” on those who do so, is a huge factor in all this. The Western media has indeed demonized Venezuela‘s government for 17 years and has therefore reduced, almost to zero, the legal and moral constraints on the US and its allies. The priority for decent people whose governments have collaborated with Trump in attacking Venezuela should be to strengthen those constraints. The attacks could easily become even more barbaric.

https://venezuelanalysis.com/analysis/14073



Sanctions are an act of war against civilians.

[acptulsa]

Didn't expect this from you. You think that Venezuela is failing because "the west" sabotaged it?
Yeah, no. This is just another failed banana republic crushing itself under its own weight.

Socialist banana republics often fail. But how often do they fail this fast and this spectacularly without a lot of help?