The political and economic crisis in Venezuela is costing US companies dearly, as General Motors can attest following the unexpected nationalization of its plant there.
The big auto-maker shut down its operations in Venezuela and laid off its 2,700 workers after the government on Wednesday seized the plant, which had been idle because of the chaotic market environment. The group had been operating in the South American country for 69 years.
GM isn't the only US business to be walloped by Venezuela's crisis.
Kimberly-Clark, a personal-care paper group, had its factory taken over last July, and posted a charge of $153 million to deconsolidate its Venezuela operations.
Biscuit-maker Mondelez -- behind America's well-known Oreo brand -- also took a one-time charge of $778 million to reconfigure its Venezuela operations as an investment in its accounts, to prevent them dragging the group's earnings down. Although Mondelez products still sell in Venezuela, it's unable to track sales.
Same story for Pepsi, which reported a $1.4 billion loss last October from its Venezuela business.
The conditions in Venezuela are a formidable challenge for any company, with hyperinflation, capital controls, political turbulence, mass demonstrations and consumers who have barely enough money to buy food and basic items.
The country was once considered one of the juiciest markets for US businesses, boasting the biggest oil reserves in the world, a free-spending middle class with a taste for American products, and proximity.
But a slump in global crude prices coupled with mismanagement has devastated the country's economy.b