CNH Industrial NV, the commercial-vehicle producer spun off from carmaker Fiat SpA in 2011, said its Iveco unit halted production in Venezuela after a currency devaluation caused “difficulties” with importing parts.
“Iveco is reluctantly suspending, with immediate effect, its manufacturing operations in the country,” Amsterdam-based CNH said today in a Milan stock-exchange filing. The truckmaker will “resume manufacturing when market conditions improve and stabilize.”
Venezuela’s bolivar dropped 88 percent on a new currency market after the government loosened foreign-exchange controls on March 24, a move designed to increase dollar supplies needed to alleviate record shortages of imports including medicine, food and household items such as detergent or toilet paper.
The shortages are fueling the world’s fastest inflation and have triggered protests nationwide since February. At least 37 people have died in the unrest, according to Public Prosecutor Luisa Ortega Diaz. Protesters clashed with police in the Venezuelan capital yesterday after armed guards prevented opposition leader Maria Corina Machado from entering the National Assembly.
CNH fell as much as 0.8 percent and was trading down 0.6 percent at $11.47 as of 10:14 a.m. in New York. That pared the stock’s gain this year to 1.1 percent.
Iveco opened its La Victoria plant in Venezuela in 1954. The move to suspend manufacturing follows Ford Motor Co.’s decision in January to scale back production in the region because of the currency shortage. The Dearborn, Michigan-based carmaker said yesterday that it’s taking a first-quarter charge of about $350 million because of a change in how it values the bolivar. Ford said Venezuelan production was slashed 75 percent in the fourth quarter, and manufacturing will remain at that lower rate this year as car sales plunge.
Iveco employees 400 workers in Venezuela to build trucks and bus chassis, the company said today. It produced 1,700 vehicles in the country last year.