Multi-national companies continue to flee Venezuela despite threats
The multinationals that remained in Venezuela through more than a decade of nationalizations, dollar shortages and losses, did so with expectations that things would eventually get better in the oil-rich nation. Now, even that hardy bunch are throwing in the towel as the economy implodes.Maduro's question shows just how out of touch he is with the reality of business decisions. When a company is losing money in certain operations they do not have to be told by the US government to leave. They take measures to stop the losses. What is more surprising is that they have stuck around so long. The Venezuelan government's response will make it unlikely they will be eager to return and face more theft of assets.
Kimberly-Clark Corp., the maker of Kleenex and Huggies, said July 9 that it was suspending operations in the South American nation. In the previous two months, Latam Airlines Group SA, Latin America’s largest carrier, Deutsche Lufthansa AG and Grupo Aeromexico SAB all said they would stop flying to Venezuela. General Mills Inc. and Bridgestone Corp. also said they were pulling out earlier this year.
The price of pulling out of Venezuela couldn’t be clearer.
Any factories that are “abandoned will be recovered,” Maduro said, as he backed the takeover of Kimberly-Clark’s facilities by the workers. The government promoted the same response when Clorox Co. announced it was closing its doors in 2014. That same year, Maduro warned airlines that pulled out they would not be allowed to return.
Citigroup Inc. also announced this week that it was scaling back some operations in Venezuela, ending so-called correspondent banking with the central bank and other private clients. While the company was quick to stress it was not pulling out, Maduro was equally quick to call foul. Citigroup’s decision was part of a “financial blockade,” he said.
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“We are now evaluating all the legal measures against all these bandits,” Maduro said on Tuesday night, referring to both Kimberly-Clark and Citigroup. “Do you think that two companies, one industrial and another among the main financial firms, would act without receiving orders and the approval of the U.S. government?”
A spokesman for Citi said the decision wasn’t politically motivated and that the bank has taken similar action in other countries earlier this year.