Finding the Positive in Bridgestone’s Retreat (Updated)


Every day brings a new dose of terrible for Venezuela’s corporate sector. One day we find out there is no sugar for Coca-Cola. Another day we learn that production of Harina Pan will end soon.

Yesterday’s news that tire manufacturer Bridgestone was leaving Venezuela – a place where finding a tire for your car is only slightly easier than finding a heart donor – seemed like the whammy of the hour. But that was until we learned that it was actually selling its business … to established Venezuelan paint manufacturer Corimon.

In the press reports, Bridgestone appears frustrated by our economy’s seemingly endless collapse. Yet it seems one company’s bailout is another company’s opportunity.

Corimon has had a long presence in Venezuela’s industrial sector. Founded by a legendary businessman, the late Hans Neumann, the company makes household brands such as Pinturas Montana. It has recently branched out into other parts of Latin America, building a presence in Paraguay, Panama, and the Dominican Republic.

For a while we have been wondering when we will hit rock bottom as a country. But with the barrage of bad news on the economic front and a seemingly hapless government at the helm, it seems some people are smelling an opportunity. In fact, I was recently told by a wealthy Chilean businessman that the time to buy in Venezuela … was now.

Corimon is making a huge gamble. If they are succesful, they will have snatched up a tire manufacturer at a dirt cheap price. Who knows – in time, we may become a bonafide tire exporter.

Let’s hope their gamble pays off – for them, and for us.

UPDATE: A reader alerts me that Corimon’s owner, Carlos Gill, is a well known boliburgués. My response is twofold: 1) damn, you can’t take a step in Venezuela without stepping in turd; and 2) I hope he honestly wants to learn how to make tires profitably.

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  1. Wow, one would have to have some pretty big balls to consider investment a good opportunity now. Sure, some of the multinationals such as Chevron are still there investing but they already have billions invested. A “start up” generally looks at a short time horizon for return on investment. In Venezuela that horizon could be 15 or 20 years out. There will be no quick economic fix once the total collapse occurs.

  2. “the time to buy in Venezuela … was now”
    And I agree, provided Chavismo is undone this year.
    However this is still a huge gamble, so many unknowns and variables out there.
    As the Recall approaches we might start to see investors buying bargains.

  3. “Buy on the sound of cannons, sell on the sound of trumpets.” – Lord Nathan Rothschild, 1810.

    Which is to say, buy when all the news is bad and prices are most depressed; sell when the news is good.

    Most people assume that bad news or good news will continue.

  4. “Buy to the sound of cannons, sell to the sound of trumpets.” – Lord Nathan Rothschild, 1810.

    That is, buy when there is bad news (the enemy blasting the city), sell when there is good news (friendly troops arriving to break the attack). Most people assume that the current news will continue, and one generally finds prices too low or too high.

    • Another of the Rothschild’s, Barron, is credited with saying “The time to buy is when there’s blood in the streets.”

      This the “blood” in this axiom is usually meant in the metaphorical sense. In Venezuela, regrettably not.

  5. I believe that Corimon is owned by Carlos Gill, Victor’s brother, so the silver lining seems to be that the enchufados are seeing that there might be light at the end of the tunnel.

    • That’s correct. It’s also why Corimon has an important presence in Paraguay, considering that’s the Gill’s country of origen and where Carlos Gill is currently operating out of. Gill has also managed to enchufarse with Evo Morales and become quite the railway magnate in Bolivia.

  6. Sorry, it may be there but I do not see it: how much is Corimon paying for Bridgestone? It may not be, after all, a huge gamble.

  7. Bridgestone made legal history some 10 years ago when they were succesfully sued in the US by the relatives of a number of Venezuelan victims of accidents caused by their import to Venezuela of defective US tires (which sale wasnt allowed in the US) and which broke up while cars were doing fast speeds on the roads , had a friend and his mother who died in one such accident (left 3 little girls orphaned) , first time ever a mass suit by non americans won a lawsuit for manufacturers liability before a US court. The victims numbered some 70 people …….!!……of course since then they have kept straight so its sadening to see them go.!!

    • Happened to me 3 times, always the right rear tire, always going 120-140 kph on the Valencia Highway. I guess I’m lucky to be alive!

    • Yes Moses , at the time Firestone and Bridgestone were part of the same corporation , under a number of road conditions the tires tended to suddenly lose their tire treads causing the car to roll over , specially ford explorer vehicles which having a less that robust cabin superstructure tended to cave in , injuring or kiling the passengers . there were in Venezuela quite a number of fatal victims , understood that these tires were imported to Venezuela after their sale in the US hade been suspended or discontinued. Also understand that after these accidents were revealed Ford and Firestone /Brigestone stopped their long time association .

  8. Another step to keep building the chavista absolute monopoly of every thing in Venezuela, which’ll get used just to syphon even more dollars from the public treasure as ALL the bolikids have done before, because that’s the only thing chavismo’s been useful for, to steal even the floor tiles from Venezuela.

  9. Not that I’m even that much of an investor, but I’m not going long on Venezuela until I see a remote sign that the whole rotten regime has a negotiated exit.

    To me, right now, and as much as it pains me to say it: Venezuela doesn’t look like a turnaround kid. It looks like Cuba right now. A slow bleed that lasts for generations and is just accepted over time as a default condition versus the exception.

    • This is the real risk, and, unfortunately, it’s growing. On the other hand, smart money (DT rate) says, rightly or wrongly, that an end is not too far away. As for Corimon, flagship Montana paint production is virtually nil, as happens for all Ven corporations taken over by Chavistas(/Govt.), with money of dubious origin.

  10. Indeed, this is a time when a bit of a latifundista attittude would benefit us all.

    Whatever anyone says, we ain’t Zimbabwe. People are just mad. We’ll get over it.

    I just wish I had a million or two handy… But I can tell you I’m taking steps to be part of Venezuela’s industrial future. If a few brave souls buy up now, they’ll find a few others to work for them. My only fear is that I may get to the game a few innings late.

    Courage, comrades! Don’t hate, preparate.

  11. We are worse than Zimbabwe actually I think.

    White Rhodesia was blessed with a good agricultural climate and soils and a cadre of settlers that captured the opportunity. The whole south African subcontinent had been colonized by Europeans and fought over in the Boers wars, yes, and an unacceptable apartheid culture keep the indigenous oppressed and the conquerors in power. Granted.

    The revolution targeted anyone white and drove investment and know how away, the spoils have been managed by a accession of corrupt governments since.

    Not very different from what Venezuela is going though. In our case it was the energy industry resources and development. All spoiled, all gone abroad.

    Venezuela is the new Zimbabwe. Only if the regime holds and keeps power. Other probable scenarios are Horn of Africa like (Mogadishu)…. Cuba, Nigeria.


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