About 100 workers protested outside Italian tyre manufacturer Pirelli’s Venezuela plant recently after finding the gates locked. Ten days prior, the country unveiled major economic reforms including a significant increase in the minimum wage – the fifth one of this year.
Union leader Luis Alvarez stated that the employees were not given any prior notice about the plant shutdown, nor did they know if it was temporary or if the operation had permanently closed down.
“Production was falling, but they always kept us on the job,” said worker Nicolas Altomaris, who was waiting at a gate for information. “Now they’ve made this decision to send us out without knowing if we’ll return.”
Union leaders report the plant employs about 700 workers. Pirelli and parent company China National Chemical Corp Ltd have yet to respond to requests for comments.
Venezuela’s Information Ministry also did not immediately comment.
On Aug. 17, Venezuelan President Nicolas Maduro announced a 3,000 percent minimum wage increase while also requiring that companies fix their product prices amidst the country’s hyperinflation crisis.
Business leaders say the economic model is unsustainable and would force many firms to withdraw from the country.
In the past, Pirelli Venezuela has temporarily halted operations due to a lack of raw materials. Currency controls make it expensive to import such materials, while price controls might force companies to sell below production costs.
The company, which supplies tyres for Formula One, manufactures tyres for cars, motorcycles, trucks and buses in Venezuela. It was acquired in 2015 by China National Chemical, known as ChemChina, which is owned by the Chinese government.
Several multinational corporations like Clorox Co and Kellogg Co have been steadily leaving the country amidst the economic collapse.
Maduro claims the country is victim of an “economic war” led by political adversaries with the help of the US government.