Kellogg shuts down Venezuela operations. Maduro howls: "Imperialists! Oligarchs!"

[GatoGordo]

Kellogg latest US brand to ditch crisis-wracked Venezuela
Originally published May 15, 2018 at 8:19 am Updated May 15, 2018 at 1:47 pm

By JUAN CARLOS HERNANDEZ
The Associated Press

MARACAY, Venezuela (AP) — Kellogg Co. closed operations in Venezuela and laid off 300 workers Tuesday at a time of widespread hunger in the crisis-wracked South American nation.

The Battle Creek, Michigan-based company said in a statement that it ceased operations as a result of the “current economic and social deterioration” in Venezuela.



The move drew an angry rebuke from socialist President Nicolas Maduro, who accused the company of trying to sabotage his chances of getting re-elected in Sunday’s presidential vote. He said he had ordered the company’s plant in the central city of Maracay to be turned over to Kellogg’s workers so they can continue to produce cereals.

“Why are they doing it today? Because we are four days away from elections and they think it will spook the people,” Maduro said at a campaign rally, adding that he would seek the international arrest of the owners of Kellogg’s Venezuelan subsidiary. “Imperialists! Oligarchs! Nobody can scare our people.”

-snip-

https://www.seattletimes.com/business/kelloggs-latest-us-brand-to-close-door-on-venezuela/

99.96% devaluation of the currency in the last year.
122,000,000% devaluation since Chavismo (1999)
Second "revaluation" of the currency in 10 years. (another 3 digits lopped off)
18,000% inflation

Maduro will (of course) nationalize the factory. He will "give it to the workers", as he did with Bridgestone, General Motors, Kimberly Clark, etc. And the new worker/owners will produce... nothing. Because nothing gets produced in Venezuela. Maduro won't let businesses have access to currency that has actual value. All of the raw materials are imported. All imported goods are paid in cash, as Venezuela has no credit. And the cash needs to be something of value... not the Bolivar.

[Sophia4]

1. Just watch.

Now I don't like Maduro, and I didn't like Chavez, but . . . . I suspect that as soon as Maduro is out, the oil fields in Venezuela will revert to the ownership of people outside Venezuela, and the price of everywhere oil will increase dramatically.

I'm just guessing. I have no special knowledge. But that is what I expect will happen. That is how the game (the rigged game) is played.

As I said, I have no affection for either Maduro or for Chavez, but this is what I expect.

The only thing that will work against my prediction is the fact that energy sources other than fossil fuels are becoming cheaper and will perhaps force some moderation on oil prices.

[COLGATE4]

2. Chavez didn't nationalize Venezuelan oil. It was nationalized more

than 40 years ago (Jan. 1, 1976) so there's little danger that ownership will now revert to the (old) original owners when Maduro is gone.

[GatoGordo]

3. As Colgate4 wrote

There is a snowballs chance in Hell that Maduro will lose.

He has banned the most popular candidates and parties.

His only legitimate threat is a former PSUV party member (but faithful Chavista) Henri Falcon who is perhaps more despised than Maduro. Should he win (a miracle), nothing would change.

He has in place at each polling station "Red Spots", where the voter is required to show their Chavismo Loyalty Card in order to get a voucher for food.

And in neighborhoods where there isn't a lot of Maduro voters, he has in the past moved the polling stations to neighborhoods that are in very rough areas where his "colectivos" (red shirt thugs) work their magic.

Maduro has "predicted" that he will win with over 10 million votes in a country with 90% poverty level and 18,000% inflation. Not too shabby for what was once the wealthiest country in all of Latin America.

~~~~~~~~~~

In regards to oil prices: OPEC has seen a drop in output and a subsequent increase in the price of a barrel of oil due to the collapse of Venezuela oil production. The oil production in Venezuela is approaching 1960's levels. But, Venezuela won't see a dime because over 1/2 of the oil it does pump out goes to paying debt to China and Russia. The rest is low quality "heavy sour" that needs diluants that are expensive (it has to be imported), and now they are in the middle of losing their assets (Conoco Phillips just seized their refinery in Curacao.) All of its oil is now paid for up front (at a huge discount) so that it can't be seized by debt holders.

[Bacchus4.0]

4. Yep, nationalized.

Venezuela seizes Kellogg unit after company halts operations: Maduro

https://www.yahoo.com/news/venezuela-seizes-kellogg-unit-company-halts-operations-maduro-195402401.html

[GatoGordo]

5. And, since they cannot import the raw materials, they will produce... nothing

Putting the factory in the hands of "el Pueblo" does nothing for the underlying problem.

There is no raw materials, because Venezuela doesn't create them (grains, sugar, etc)
They cannot buy the raw materials abroad, because the brokers don't accept Venezuelan credit, nor currency.
Maduro will not release to anyone the cash (dollars, Euros, etc) needed to buy the raw materials.

It will be interesting to see how much food product AgroPatria (the "new", nationalized Kelloggs) will pump out in the next week? Kelloggs couldn't purchase raw materials... I wonder where Maduro will get them from? Maybe the same source he gets his "powdered malk" (milk powder and chalk powder)... China? Except China isn't accepting VZ credit anymore either!