Economy The labor dispute at General Motors (GM), which has lasted six weeks thus far, is risking even further the performance of the automotive sector, since the US automaker has a 40 percent share of vehicles production in Venezuela and 35.5 percent of car sales in the domestic market.

Since July 27, a group of workers members of the pro-government trade union Vencedores Socialistas (Socialist Winners) has blocked the access to the facilities of the plant located in the city of Valencia, in central Carabobo state. These protests have led to a complete shutdown of operations at the assembly plant.

In August, the labor conflict has resulted in a dramatic drop of 96.6 percent in GM's vehicles production. During last month, only 255 units were assembled in GM's truck plant located in Mariara, Carabobo state, far from the conflict zone.

Meanwhile, the Venezuelan sales of the car automaker showed a gloomy outlook at the end of last month. The car manufacturer sold 80 percent vehicles less, compared with August 2007, from 14,090 units sold a year ago to 2,833 units last month.

This performance led to a 60.5 percent monthly drop, which is the worst fall in the car industry over the past five years, according to data from Venezuela's Automotive Chamber (Cavenez).

Lack of foreign exchange
With GM's normal levels of production and marketing in the domestic market, the US automaker represents the main power of the Venezuelan automotive industry. Thus, the shutdown of its main plant hits the performance of a sector that not only has been affected by problems with trade unions.

Apart from the blocked access to the facilities of GM's plant, the company shut down the plant previously by lack of foreign exchange. In total, the plant has closed its operations for eight weeks. During this period, the company has not completed the assembly of a car in the production line.

Overall, the car industry has faced several obstacles to obtain dollars at the official exchange rate because the policy implemented this year by the Executive branch of government aims to restrict imports of automobiles. Therefore, the foreign exchange authorization has been an additional problem for the automakers.

With respect to the labor dispute, which is the current obstacle to assemble vehicles, General Motors has mobilized its regional directors to ensure government's intervention to solve the problem.

Leaders of another GM's trade union have criticized the Ministry of Labor because the government's agency has not opposed firmly to the actions implemented by the Vencedores Socialistas trade union, which is affecting not only General Motors but also its 1,600 workers.

In fact, GM's top officers has hinted the possibility of closing its plants in Venezuela if the company does not overcome the labor problems and the lack of regular foreign exchange authorizations by the Foreign Exchange Management Committee (Cadivi).

stejero@eluniversal.com

Translated by Gerardo Cárdenas

Suhelis Tejero Puntes
EL UNIVERSAL