GM halts operations in Venezuela after factory is seized

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General Motors has shut down its Venezuelan operation and laid off 2,678 people after the crisis-struck Latin American country nationalized the plant and seized cars, the company says.

GM has described the takeover as an "illegal judicial seizure of assets", and that the move was a "total disregard" of the company's legal rights.

GM's Venezuelan subsidiary, General Motors Venezolana, has operated in the country for almost 70 years and employs almost 2,700 workers there.

GM can seek compensation and damages for its lost plant in several different global venues, said Nigel Blackaby, a lawyer at the Freshfields Bruckhaus Deringer law firm, which has battled Venezuela in several high-profile cases in worldwide courts.

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Venezuela's Information Ministry was not immediately available for comment. More to this, the opponents of President Nicolas Maduro blamed him of trying to create a dictatorship.

Despite Venezuela's grim outlook, many auto makers have chose to stay put and avoid the drastic step of shutting down operations to avoid losing market share in case the economy dramatically improves or a more business-friendly government takes power. The crisis has affected many USA companies who have previously made a decision to set up shop there-including Ford, which wrote off all Venezuelan investments in early 2015, taking a $800 million loss. GM says that it will seek legal action, but it isn't likely to get anywhere.

Venezuela has been suffering from a severe economic crisis with hyperinflation, food shortages and huge contraction in the economy.

"They came here with all the files and documents saying that they have been fighting this since 2000, saying that General Motors has not been fulfilling its contracts", Perdomo said.

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The Venezuelan people have been faced with an economy that has been consistently going downhill under the leadership of socialist President Nicholas Maduro.

While this was reversed three days later, protests had already erupted. But a local newspaper in Valencia, the industrial hub where the GM plant is located, said the authorities began their seizure of the plant on Tuesday and may also have frozen GM's Venezuelan bank accounts.

It's not the first time the Venezuelan government has seized a foreign corporation's facilities.

"Yesterday, GMV's plant was unexpectedly taken by the public authorities, preventing normal operations". The government last year abruptly postponed regional elections the opposition was heavily favored to win and cut off a petition drive to force a referendum seeking Maduro's removal before elections late next year.

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So far this month, clashes associated with the protests have resulted in seven deaths, more than 200 injured and 538 arrests.