Tire company Goodyear announced on December 10 that it was ceasing operations in Venezuela. In the statement, the company explained that it had made the decision over the economic situation and sanctions.
The announcement was not a surprise for the population since they have seen many companies leave the country in recent years. Back in September, Tire maker Pirelli announced a similar decision. The company had struggled in the last few years and had suspended production in previous occasions.
Reports said the company was now working on the payments for its employees. On top of the payments, it was reported that employees would also receive ten tires. Hundreds have been left without a job after the decision but The Republic reports that the government has vowed to reopen the plant.
The news site reports that the government released a statement on Tuesday explaining that it was looking to preserve the more than 1,000 jobs. This statement is also not a surprise to the population since the government has done this in the past. The efforts by the government have fallen short, with many of the plants reopened being abandoned or simply not producing enough.
Government Has Seized Other Plants
In May, cereal company Kellogg’s announced that it was leaving the country over the economic situation. Hours later, the government announced that it was seizing the plant and that it would begin production again. It is currently unclear if the plant is still producing the cereals.
Kellogg’s, which had been in the country for a long time, only offered a few products in the country. Corn Flakes and Frosted Flakes were some of the products in the lineup. The products were difficult to find in the country since there are shortages on just about everything. The decision left the country without one of its most popular cereals.
Record Levels of Inflation
Goodyear’s decision comes as the country is in the middle of record levels of inflation. Organizations and experts believe that the situation will only get worse in the upcoming months.
The Venezuelan government has announced several changes to the economy this year but nothing seems to be working. Inflation for 2018 is expected to reach 1.3 million percent, according to the IMF. The IMF has also predicted that inflation will reach even higher levels at 10 million percent next year.
Companies Are Exiting The Country
Many airlines, tire makers, clothing brands and car companies have exited the country over the situation. Earlier this year, reports revealed that several McDonald’s locations had closed in the country. There are little details on the decision but experts believe it is linked to the economic crisis.
The Venezuelan government has not given details on what it plans to do with the plant but previous efforts have seen plants shut down or lose a lot of production shortly after. Tires are already difficult to find in the country and the closure will make things even harder for Venezuelans. Goodyear is the second tire company to exit the country in the last six months.