Venezuela Backs Worker Takeover of Kimberley Clark as Citibank Moves to Close BCV Account

Maduro green lighted a request by workers to occupy a factory owned by US consumer products giant Kimberly Clark after the latter shut its doors, firing nearly 1000 workers. 

By Lucas Koerner
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Philadelphia, July 12, 2016 (venezuelanalysis.com) – Venezuela’s Labor Ministry approved Monday a workers’ request to occupy a plant owned by the US consumer products giant Kimberly-Clark after the latter closed its doors in the South American country.

The order came directly from Venezuelan President Nicolas Maduro who condemned the transnational firm for its decision Saturday to shut down a diaper and toilet paper factory in Maracay, firing 971 workers.

“Forty-eight hours ago, without notice, a US company called Kimberly-Clark, violating national laws and the constitution, fired almost 1,000 workers from its production plant, closed the door and left the country,” declared Maduro, speaking on state television.

Under Venezuela’s 2012 Labor Law, mass firings are strictly prohibited and firms that shut their doors illegally are liable to be reopened under workers' control.

“Kimberly is now in the hands of the workers - producing, working, and we are going to invest the necessary resources in order to consolidate [the plant],” Maduro added.

According to Venezuela’s Labor Ministry, the plant has a monthly output of 33 million diapers, 20 million sanitary pads, 27 million thin liners, and 17 million rolls of toilet paper– all of which was brought to a standstill due to the closure. 

Following the workers' takeover, the factory is now operating at full capacity, confirmed a Labor Ministry inspection Tuesday. 

In a press statement, the Texas-based conglomerate defended its decision to leave, complaining of alleged difficulties accessing raw materials as well as US dollars for imports.

In recent months, a slew of multinational firms– including Bridgestone, General Mills, and Procter & Gable– have likewise scaled back operations in the country citing similar problems associated with Venezuela’s economic downturn.

The Maduro government, for its part, has accused these companies of economic “sabotage”, pointing to the vast quantities of US dollars these firms have received from the Venezuelan state in exchange for production or imports.

As part of this “economic war” waged by transnational firms and foreign states against his government, Maduro also took at aim at what he termed a “financial blockade” by major banks, credit agencies, and international financial institutions.

On Monday, the left-wing leader denounced a decision by Citibank to close the bank account of Venezuela’s Central Bank (BCV) in the next month.

"With no warning, Citibank says that in 30 days it will close the Central Bank and the Bank of Venezuela's accounts," Maduro said in a speech, noting that the government uses the US bank for a range of international transactions.

The move comes as Venezuela faces US$8.3 billion in bond payments due later this year, which international creditors have refused to renegotiate.

"Do you think they're going to stop us with a financial blockade? ... No one stops Venezuela,” the head of state continued.

In February, Venezuela defied expectations in making a US$ 1.5 billion payment on PDVSA bonds.

Over the last four months, the price of Venezuelan oil has steadily rallied from an historic low of US$24 in February, reaching an average of nearly $40 in June.

Venezuela depends on crude exports for nearly 96% of its foreign currency earnings. 

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