The Venezuelan government’s takeover of a General Motors Co. plant on Wednesday is just the latest incident in a long history of perilous relationships between U.S. corporations and unrest in the South American country, including a number of incidents involving Toledo-area firms.
In 2010, under then-President Hugo Chavez, Venezuela moved to seize a pair of glass plants owned by Owens-Illinois Inc. The Perrysburg company had just a month earlier paid $603 million to buy Venezuela’s third-largest glassmaker in a bid to expand its exposure in emerging markets. At the time, the company had more than 1,000 employees in Venezuela.
A little more than a year ago, the World Bank’s International Centre for Settlement of Investment Disputes ruled that O-I should be awarded more than $485 million by the country to compensate for nationalizing the plants and gave the company standing to pursue the award.
However, in its most recent annual report, O-I acknowledged that would be difficult.
“The company intends to take appropriate steps to vigorously enforce and collect the award, which is enforceable in approximately 150 member states that are party to the ICSID Convention,” the filing said. “However, even with the lifting of the stay of enforcement, the company recognizes that the collection of the award may present significant practical challenges.”
A company spokesman did not return an email seeking comment Thursday.
Dana Inc., the only other locally based publicly traded firm that had notable interests in Venezuela, sold off its two plants there in early 2015. At the time, officials of the Maumee automotive parts supplier said the country’s economic uncertainties were too great a risk. Dana had about 540 employees in the country at the time.
The company had warned in 2014’s first quarter that devaluation of Venezuela’s currency could affect its earnings by as much as $40 million.
Going back further, strife in Venezuela led to one of the region’s wildest business stories. In 1976, William Niehous, an O-I executive, was drugged and kidnapped from his Caracas home by seven armed guerillas who were at the time described as leftists who believed O-I was meddling in the country’s domestic affairs.
Mr. Niehous was held captive for 3½ years before returning to Toledo in 1979. He died in 2013.
Contact Tyrel Linkhorn at email@example.com or 419-724-6134.
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