Brent Snavely

Detroit Free Press

General Motors said it will take a $100-million charge against its profits after losing control of its assembly plant in Venezuela.

The automaker's plant was seized last month by government officials and is no longer under the company's control. While the company has said it plans to fight the seizure, it is unlikely it will regain control of the plant anytime soon.

For that reason, the automaker said Tuesday that it plans to "deconsolidate" operations from its accounting books, essentially wiping out the value of the plant and the company's assets.

"The deconsolidation follows the unexpected seizure of GM's Venezuelan plant on April 18 by judicial authorities, which forced the company to cease operations and terminate employment relationships due to causes beyond the parties' will," GM said in a statement. "All former employees have since been paid separation benefits as legally required."

Related:

How GM got caught in the grip of Venezuela's chaos

That doesn't mean the automaker has given up on its legal rights. It simply means GM will no longer include earnings or losses from Venezuela in its South American results.

"Last week, GM filed an appeal with the Venezuelan Supreme Court, which, if successful, would dismiss the underlying lawsuit that led to the seizure and reverse all related civil and criminal actions," the company said.

GM has been concerned about losing control of the plant for several years and has been warning investors as demand for new cars dropped amid political and economic chaos in the country. The automaker reduced the estimated value of the plant by $400 million in 2014 and $700 million in 2015.

Ford also removed its Venezuelan operations from its books in 2015 and took an $800-million charge to account for the loss of value of its plant.

GM opened its plant in Venezuela in 1948 but stopped making vehicles there as the economy faltered.

“We haven’t been operating in a normal fashion there for 12-18 months,” GM Chief Financial Officer Chuck Stevens said Friday. "We don’t necessarily want to exit the country, but certainly, it’s not an environment that you can invest in or run a normal business at this point.”

Contact Brent Snavely: 313-222-6512 or bsnavely@freepress.com. Follow him on Twitter @BrentSnavely.