Venezuelan auto industry in free fall amid economic woes

viernes 8 de agosto de 2014 10:58 GYT

By Eyanir Chinea

VALENCIA, Venezuela Aug 8 (Reuters) - Though it is the middle of the work day, the Jeep assembly plant in the central Venezuelan city of Valencia is empty, the machinery still.

The factory, which once employed more than 1,000 workers, made its last car five months ago. Now assembly lines at the plant, located in the oil-rich country's industrial heartland, are quiet. Workers were sent home after raw materials ran out.

Venezuela's economic crisis threatens to paralyze what was once South America's third-largest automotive industry, as stagnation in oil production and a badly managed currency control system stymie private businesses' access to foreign currencies and ability to import supplies.

"They are asking to fire 119 workers," union leader Henry Ospina, who represents employees of Chrysler, which makes Jeeps, told Reuters in Valencia. "We're fighting, but the company says everyday it's harder to maintain staff costs."

Like Chrysler, a subsidiary of Italian company Fiat , plants belonging to Ford, General Motors, Toyota, Iveco, part of CNH Industrial ; Mack, a subsidiary of Swedish Volvo ; and Mitsubishi are all operating at minimum capacity.

Production in 2014 has fallen 83 percent year-on-year, with just 7,000 cars built, compared with some 43,000 made during the same period last year.

Only 876 vehicles were produced in July, an 87 percent plunge from the same month in 2013, according to the Venezuelan Automotive Chamber.

The auto industry says it is owed $1.9 billion in dollar liquidations by the government of President Nicolas Maduro.   Continuación...