Caracas, May 16, 2018 (Venezuelanalysis.com) – US food-manufacturing giant Kellogg’s announced Tuesday that it is immediately shuttering operations in Venezuela, laying off some 570 workers. The Michigan-based firm has been producing in the South American nation for 57 years.
President Nicolas Maduro claimed the company’s decision to withdraw was politically motivated, coming just days ahead of Venezuela’s presidential elections this Sunday, which take place in a highly charged atmosphere of escalating foreign sanctions and threats.
“Why are they doing it today? Because we are four days away from elections and they think it will spook the people," he said during a campaign rally Tuesday.
The president and socialist candidate also encouraged the plant’s workers to take over Kellogg’s Maracay-based factory and said that he would press charges against the company for violating workers’ rights. Venezuela’s 2012 labor law, widely considered one of the most progressive in the world, prohibits the mass firing of workers and even goes as far as to legalize worker takeovers of enterprises abandoned by their employers.
The Kellogg Company's statement said that the decision was purely economic, attributing it to the “current economic and social deterioration” in the country. The company informed its workers through a surprise communique posted on the entry gate on Tuesday morning.
A labor organizer close to the former Kellogg staff told Venezuelanalysis that the possibility of a successful takeover depends on a number of factors including restoring acceptable labor conditions and worker morale, as well as overcoming some technical obstacles. The factory, she said, has four months of raw materials in stock.
Although the US-owned multinational produces 75% of the breakfast cereal consumed in the country, most Venezuelans eat more traditional foods, such as empanadas or arepas, for breakfast. Other companies that have pulled out of the Caribbean country in recent years include Clorox, Kimberly-Clark, General Mills, General Motors, Colgate-Palmolive, and Harvest Natural Resources.
The lead up to Venezuela's elections has also coincided with US oil giant ConocoPhillips’ lightning seizure of PDVSA assets in the Dutch islands of Bonaire and Curacao, following an ICC decision to award it two billion USD in damages.
In recent days, the Houston-based transnational has reportedly won suits in Dutch courts authorizing it to go after PDVSA assets on the Caribbean islands. On Tuesday, Reuters reports that ConocoPhillips moved ahead to seize two cargos of fuel and crude near a terminal operated by PDVSA’s US subsidiary, CITGO, in Aruba.
Venezuela has responded to the seizures by attempting to safeguard its tankers. Nevertheless, the US firm’s actions threaten to disrupt the country's oil exports, one-third of which passes through the Dutch Antilles.
Conoco CEO Ryan Lance informed shareholders that the company has filed lawsuits in the US, Hong Kong, United Kingdom, and throughout the Caribbean in a bid to seize further PDVSA assets across the globe.