CARACAS (Reuters) - Tiremaker Goodyear Tire & Rubber Co (O:GT) is permanently halting its operations in Venezuela, according to a union leader and a letter seen by Reuters, amid an exodus of foreign companies from the crisis-stricken South American nation.
The collapse of the country's socialist economic system has decimated demand for consumer goods and left firms unable to import raw materials, leading companies ranging from Kimberly-Clark Corp (N:KMB) to Kellogg Co (N:K) to leave for good.
"A lawyer called from abroad to inform of that operations were being halted," said union leader Jorge Rodriguez in a telephone interview. "The plant is open but nothing is functioning."
Goodyear did not immediately respond to a request for comment.
The company is making legally mandated severance payments and is giving each worker 10 tires, which are of enormous value due to chronic product shortages, it said in a letter written to workers.
"This letter is to inform that as of today, Goodyear de Venezuela has been forced to halt its operations," reads the letter.
Dozens of multinationals are hanging on in Venezuela by maintaining minimum operations, hoping for a turnaround in the country's fortunes.
Many survive by limiting their product lines, which economists and corporate advisors call a strategy to prepare for an eventual exit.