Guardian: Seized Venezuela Plant Needs Major Repairs

September 4th, 2016 by Trey Barrineau

The socialist government of Venezuela used a routine maintenance shutdown of Guardian Industries’ float glass furnace at its facility in Maturin as a pretext to seize the plant in late July, according to a statement the company released over the weekend. Guardian says it warned the South American country that it could be creating a dangerous situation at the facility  for employees and the community if it continues to make glass there without completing the maintenance work.
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Guardian also forcefully rejects Venezuela’s claim that the  company  “abandoned” or “sabotaged” the facility, and it says the government violated international investment treaties by taking over the factory.

“The Venezuelan government seized control of Guardian Venezuela when the company attempted to implement an orderly and safe cool-down of its glass melting furnace to protect the safety of its employees and the community in general, while otherwise continuing commercial operations,” the statement reads. “Float glass plants operate at extremely high temperatures, continuously, 24 hours a day, 365 days a year, throughout their operational life. All float glass plants must be temporarily shut down at the end of their operational life in order to undergo major repairs requiring specialized and technical expertise. Contrary to what has been asserted by the Venezuelan government, Guardian Venezuela never abandoned or closed its operations. Guardian has warned the Venezuelan government of the grave safety risks to plant employees and the community in general should it continue to operate the plant without completing major repairs.”

Guardian’s comprehensive press release is the company’s first statement about the plant seizure since a short announcement on August 1, and it answers critical questions about the situation at the facility at the time of the takeover.

Since taking over the plant in late July, Venezuela’s government has told sympathetic media outlets there that Guardian closed the facility weeks ago as part of an “economic war” U.S. businesses are waging against the country, a catch-all claim that officials in Venezuela have been making for years. However, most analysts cite the collapse of global oil prices, combined with the country’s disastrous socialist economic policies, for causing drastic shortages of raw materials and skyrocketing inflation, for creating conditions that are forcing foreign companies to pull out of Venezuela.

To prevent a popular uprising, the government declared a state of emergency in mid-May and ordered the state seizure of factories that have closed because they can’t get raw materials. For example, Venezuela seized a Kimberly-Clark plant in July after the U.S. diaper maker shut down because of deteriorating economic conditions in the country.

Recently, massive protests have swept the country demanding a recall election for President Nicolas Maduro, whose popularity has plummeted as he has “enabled the government to intimidate, censor, and prosecute its critics,” according to Human Rights Watch’s 2016 report on Venezuela.

Here is the complete text of Guardian’s statement:

“On August 1, 2016, Guardian Industries Corp. and its Spanish subsidiary Guardian Industries Navarra SL (‘Guardian’) announced that the Venezuelan government had seized control of Guardian de Venezuela SRL (‘Guardian Venezuela’).

“On August 19, the Venezuelan government published a resolution granting a government-sponsored Special Administrative Board full authority to control and operate Guardian Venezuela, thereby reaffirming the government’s expropriation of Guardian Venezuela and its assets. These actions by the Venezuelan government have been taken without the consent or involvement of Guardian or any of its affiliates and in violation of applicable investment treaties.

“The Venezuelan government seized control of Guardian Venezuela when the company attempted to implement an orderly and safe cool-down of its glass melting furnace to protect the safety of its employees and the community in general, while otherwise continuing commercial operations. Float glass plants operate at extremely high temperatures, continuously, 24 hours a day, 365 days a year, throughout their operational life. All float glass plants must be temporarily shut down at the end of their operational life in order to undergo major repairs requiring specialized and technical expertise. Contrary to what has been asserted by the Venezuelan government, Guardian Venezuela never abandoned or closed its operations.

“Guardian has warned the Venezuelan government of the grave safety risks to plant employees and the community in general should it continue to operate the plant without completing major repairs.

“Guardian and its affiliates cannot be responsible for the safety of employees or any liability or damages resulting from the government’s continued operation of the plant.

“Should the Venezuelan government produce and sell glass from the plant, Guardian cannot be held responsible for product quality and will consider any use of Guardian’s name, Guardian product names, or Guardian trademarks to be unauthorized and a misappropriation.

“Throughout this process, Guardian and Guardian Venezuela have acted to protect the safety and best interests of plant employees and the community.

“Guardian Industries Corp., Guardian Industries Navarra SL, Guardian de Venezuela SRL and their affiliates continue to reserve their rights under all applicable laws and treaties.”

 

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