The Chery on Top (FUBAR)

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chery 0 km
They get 32 mpg, but they get hungry an hour later anyway.

Story FUBAR: Gah, it’s been a terrible week for corrections. Turns out Great Wall de Venezuela was not a Chinese firm at all, it was a Venezuelan firm that held a licence issued by the Chinese parent company. No Chinese have been expropriated in the making of this post.

In a stunning application of the Dioógenes Andrade doctrine, the Maduro administration has just announced the expropriation of Great Wall Motors, the Chinese car-maker that had leased its Tejerías plant to Chery, a competing Chinese car-maker, and ZGT, a Chinese partner.

Announcing the move, Industry Minister Ricardo Menéndez said he wanted to ensure the Aragua State plant raises production from 18,000 cars per year to 30,000…cars assembled, you do understand, from components imported from China, (in fact, from the parent company of the firm they’ve just seized), almost certainly using dollars loaned to us by China for that very purpose…so, all in all, a great day for automotive sovereignty, wouldn’t you say?

I’m sure the move will vastly improve the climate for those loan negotiations…who doesn’t like to do business with partners who randomly steal your stuff, anyway?

In a fun curlycue to this story, the plant they’ve just snatched is one they’d assigned to Great Wall back in 2009 after they’d…wait for it…expropriated it from the previous owner. No word yet on whether the republic is taking over just Great Wall’s assets or whether we’ll take the liabilities, too…

[Correction: This post originally identified Chery as a Great Wall brand.]

1 COMMENT

  1. Ummm…

    1) China sets up a factory in Venezuela to assemble cars from parts made in China.
    2) China lends some money to Venezuela.
    3) Venezuela uses part of the lent money to pay China for the expropriated factory.
    4) Venezuela uses another part of the lent money import from China even more autoparts.
    5) Venezuela pays interests to China on the lent money.

    Am I missing something important, or the big winner here is China?.

  2. According to El Universal the expropiated plant was not producing cars for Great Wall but was instead being leased to Chery, a car producing company owned 51% by the govt and 49% by ZGT a private Venezuelan concern (wonder who owns ZGT ?) . From another source understand Great Wall was no longer being allowed to import parts from China . Great Wall will probably be compensated handsomly for its plant to keep Chineses interests happy !!

  3. Further correction : ZGT is chinese owned , although the name of the company is not identified , it might well be that SGT is just an affiliate of Great Wall which makes the expropiation even more difficult to understand . Sorry !!

  4. Great Wall Venezuela is/was owned by a very prominent Venezuelan lawyer. The capital is 100% Venezuelan, I think that they had a manufacturing and sales license from China, thus not Chinese interests have been affected, at least directly. On the contrary, they are hurting a Venezuelan Company to benefit the Chinese.

    • Will Venezuelan courts be of any assistance in assisting with negotiation on compensation (book or market valuation) if sought?

    • So the lesson today: License technology from a Chinese company, and you have a good chance of having your company stolen for the benefit of China.

      Somehow I don’t think Great Wall is actually happy about this… it is pretty bad advertising for a car maker that desperately needs overseas market share.

  5. The next move, should be the government expropriating itself.

    That’s how they’ll get around any call for a Constituent Assembly.

    Listo!!

  6. Late this afternoon talked to someone connected to Great Wall ( the expropiated plant) and just as Cacr210 posted the plant belongs to a Venezuelan National not to the chinese company . The govt has been attempting for 3 years to buy the plant from its Venezuelan Owner but being rebuffed they finally decided to expropiate it and transfer it to a joint venture between the govt and a subsidiary of Great Wall of China . In short the company being expropiated is a Venezuelan Company and it has been expropiated in order to transfer it to a company half owned by the Chinese . Way to go Maduro now we are expropiating national companies to pass them to companys with Chinese participation !! Surreal!!

    • These sorts of expropriations have a proud history in Latin America. It dates back to Honduras in 1900 where land was expropriated and handed over to the United Fruit Company! The former owners then had the privilege of picking Bananas for their new foreign corporate masters. Soon Venezuelans will have the honor of working for Chinese manager/owners, thereby avoiding working for filthy Venezuelan bourgeoisie. What a sovereignty! Way to go Maduro!

  7. Francisco, do you know why CAVENEZ (the Venezuelan automobile manufacturer’s association) doesn’t publish any information whatsoever on sales or production of these Chery vehicles, but does so for all other vehicles produced and sold in Venezuela?

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