Ford Motor Company (NYSE:F): Suspends Vehicle Assembly In Venezuela

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Dallas, Texas 05/06/2014 (FINANCIALSTRENDS) – Ford Motor Company (NYSE:F) yesterday reported to have suspended operations in Venezuela because of lack of foreign currency required to import parts for its assembly operations. Alike many other private businesses in Venezuela, carmakers are also complaining that the socialist government’s currency controls are bothering them from import of essential products because of recently imposed restrictions and delays in purchases of dollars.

Reuters reported from the source of local workers at Ford’s Venezuela plant that the plant in the city of Valencia would be halted until the end of May 2014. Form informed to have assembled only 499 cars during three months period of January to March 2014. Yesterday the stock closed at $15.74, losing $0.16 from its previous close.

Plant may Reopen Soon:

Haiman El Troudi, Venezuelan Transport Minister, confirmed the stoppage at the plant and ensured that the plant should reopen in couple of weeks after a meeting between the government officials and Ford Motor Company (NYSE:F)’s representatives that resolved some critical bottlenecks hindering the operations at the plant. The minister also informed the release of $20 million in debt to Ford by the state currency board Cencoez during this week.

Toyota Motor Corp (ADR) (NYSE:TM) also suspended its vehicle assembly plant in Venezuela during February 2014 for the same reasons. Other automobile companies having assembly plants in Venezuela include General Motors Company (NYSE:GM), Mitsubishi as well as Fiat Chrysler.

Automobiles are Just another Sector:

Auto industry in Venezuela reported 76% decline in 1Q14 to just 3,424 vehicles as compared with 14,316 vehicles reported during the same period of 2013. Just like many other sectors, automobiles are just another sector where Venezuelan government is facing outcry to release more dollars to fuel imports. However, President Nicolas Maduro believes that businesses are exaggerating needs to flip dollars for profit on the black market.

However, the government officials are holding urgent meetings with industry leaders to attempt and resolve problems ad help reverse the fall in local production.

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