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Companies halt operations in Egypt

Published: Friday, Aug. 16, 2013 4:51 p.m. CDT
Caption
(AP photo)
Egyptian army soldiers take their positions on top and next to their armored vehicles while guarding an entrance to Tahrir Square, in Cairo, Friday.

DETROIT – A number of international companies have suspended operations in Egypt as three days of violent street battles make the streets of Cairo unsafe.

General Motors Co., Electrolux AB, Royal Dutch Shell PLC, Toyota Motor Corp., Suzuki Motor Corp., BASF SE and others shut down facilities and told thousands of workers to stay at home during unrest that has left about 700 people dead since Wednesday.

“This was a precautionary safety measure to ensure employees would not be exposed to risks traveling to and from work,” Daniel Frykholm, a spokesman for Swedish appliance maker Electrolux, said in an email. The company, which has about 6,700 workers in Egypt, asked employees to stay home Wednesday afternoon and Thursday. Friday and Saturday are the Egyptian weekend, and the company will decide Saturday evening if it’s safe enough to resume normal operations, Frykholm said.

Royal Dutch Shell closed its offices Thursday. They will remain shuttered Friday and Saturday. The company also restricted employee travel as the violence continued and said it was monitoring the situation.

General Motors’ Egyptian operations will remain shut indefinitely, including a plant in the Cairo suburb of 6th October City where it makes cars, light trucks and minibuses. The auto giant has about 1,400 workers in Egypt, where in 1983 it became the first private automaker to establish operations in the country.

At least 698 people have been killed in violence that continues to rage after riot police razed two Cairo encampments where supporters of President Mohammed Morsi were protesting his ouster.

Morsi was deposed by the military on July 3 after months of protests against his rule.

On Friday, at least 60 people, including eight police officers, died in fighting nationwide. Tens of thousands of Muslim Brotherhood supporters clashed with civilians, police and troops in the fiercest street battles to engulf the capital since the country’s Arab Spring uprising.

In Cairo, German retail giant Metro closed its headquarters, and its only two grocery stores in the capital were shuttered on Friday, a spokesman for the Duesseldorf company confirmed.

The chemical company BASF temporarily closed its manufacturing facilities and offices. BASF has been operating in Egypt for about 60 years and produces chemicals used in construction at a plant in the Cairo suburb of Sadat City.

IHS Automotive analyst Paul Newton in London said that Toyota and Suzuki also halted Egyptian production. Because of the unstable political situation, the forecasting company predicted that light-vehicle production in Egypt would fall almost 8 percent this year, with sales dropping nearly 4 percent.

Egypt is one of the largest vehicle manufacturing centers in Africa, Newton said.

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