In a show of good faith, Goodyear Tire & Rubber Co., which will be shuttering its Venezuela operations and making local workers redundant, will pay a severance package to its more than 1,200 employees and give them each 10 tires, which are a valuable commodity in the crisis-torn country.
According to Driving, when employees arrived to work recently, they found a letter on the door, announcing that the company had been forced to cease operations. Goodyear is only the latest multinational company that has shut down in the Latin American nation, which has been wracked by political corruption and unrest. Kellogg and Kimberly-Clark have also ended operations in Venezuela due to hyperinflation, which has made doing business in the local currency unmanageable.
The company has lost tens of millions in revenue in the last few years as the Venezuelan bolivar plunged in value against the US dollar. The company, which is based in Akron, Ohio, began deconsolidating in the fourth quarter of 2015 but has maintained a staff of nearly 1,100 in the industrial city of Valencia.
According to Eduar Bremo, who belongs to Venezuela’s Goodyear factory-workers union, the plant was producing nearly 1,000 tires a day, but due to a shortage of materials and rising costs, it has had to close up shop.
Goodyear employee Julian Rodriguez, 62, who has worked for more than thirty years with the tiremaker, said he had no prospects after losing his only source of income, defining the situation as “grave.”
Last week, Ford Motor Co. also started streamlining its Venezuela operations and buying out its remaining employees. Also, General Motors has had its assets, which include factories and cars, seized by the government.
The International Monetary Fund (IMF) has projected that inflation in Venezuela could surpass 1 million percent by the end of the year. President Nicolas Maduro, who implemented an economic recovery plan in August, which includes raising the minimum wage and printing a new currency, has failed to make a positive impact on the economy, given that regardless of wage increases, unemployment is growing daily. Some experts have equated the situation in Venezuela to the American Great Depression of the 1930s, only worse.