Venezuelan Labor Minister Oswaldo Vera on Monday seized a factory owned by Kimberly-Clark, a U.S. company, after production was halted over the weekend due to a lack of raw materials. Vera, seen here speaking to a crowd within the factory in Maracay, said the closure of the plant was illegal because the company fired nearly 1,000 workers without first consulting the government. Photo courtesy of Ministry of Popular Power for Social Work Process
MARACAY, Venezuela, July 12 (UPI) -- The Venezuelan government seized a factory owned by Kimberly-Clark, a Texas-based company, after production was halted over the weekend due to a lack of raw materials.
Venezuela said Kimberly-Clark's closure of the factory in Maracay was illegal because the company fired nearly 1,000 workers without first consulting the government. Kimberly-Clark said it closed the factory due to a lack of raw materials, soaring inflation and strict currency controls amid a deteriorating Venezuelan economic collapse.
"Kimberly-Clark will continue producing for all Venezuelans and is now in the hands of the workers," Venezuelan Labor Minister Oswaldo Vera said Monday. "We've just turned on the first engine."
Vera, who belongs to President Nicolas Maduro's ruling United Socialist Party of Venezuela, traveled to Maracay in Venezuela's Aragua state to deliver a televised address from the factory before signing an order to seize the facility.
Vera said that workers urged him to restart production at the plant. Kimberly-Clark is the latest international company to either scale back or withdraw operations in Venezuela. General Mills and Procter & Gamble have also recently reduced operations.
Kimberly-Clark produces personal and healthcare products, including toilet paper and diapers.
"If the Venezuelan government takes control of Kimberly-Clark facilities and operations, it will be responsible for the well-being of the workers and the physical asset, equipment and machinery in the facilities going forward," Kimberly-Clark said in a statement.
"It doesn't matter who's running the factory," Henkel Garcia, director of the Caracas business consultancy Econometrica, told the Wall Street Journal. "The bottom line is that there are no raw materials that anyone can afford to import."
The economic crisis, and food and medicine shortage in Venezuela prompted up to 35,000 people in the border town of San Antonio del Tachira to travel to the Colombian town of Cucuta to purchase basic goods. The border crossing linking the towns had been closed since August after three Venezuelan soldiers and a civilian were injured in an attack by suspected smugglers in San Antonio del Tachira. The crossing was opened for 12 hours on Sunday to allow Venezuelans to buy goods.
