Analysis by PMOI/MEK
Jan. 8, 2019 - The Iranian regime’s destructive policies and its expenditures on terrorism and weapons-building continue to deal heavy blows to the economic infrastructure of the country. Recent news pertain to an entire chain of factories and production units being shut down as a result of the mismanagement of the country’s economy by regime officials.
In an internal report, an advisor to the labor minister admits, “The last stats that we have from September 2018 was that there are 1,350 companies faced with problems and 171 companies are in critical state.”
A considerable number of the mentioned companies are in the automobile parts industry and are faced with critical problems.
According to state-run media, the Iranian regime’s authorities are confessing to the poor conditions of the country’s industrial sector. The head of Iran’s Association of Parts Builders, “In the first seven months of this year, 100,000 parts workers have lost their jobs, and if fundamental changes aren’t made, the figure will rise to 400,000.”
The number of unemployed in this industry is not limited to the mentioned figures. The Iranian regime’s media are warning against the possible unemployment of 450,000 parts workers because of the crisis in the country’s automobile manufacturing sector, a deadlock for one of the largest industries. There are approximately 800,000 workers working in this industry and if the crisis continues, half of these workers will join the expanding masses of unemployed Iranians.
An executive from Beshel Company, one of the principal manufacturers of automobile parts in Iran since 2016, says that the company used to produce 1,300 engine cylinders and cylinder heads every month. But in 2018, the company’s production has reduced to 350 cylinders per month.
The executive said their agreements with their customers, mostly automobile manufacturers, was to pay for their purchases in a 90-day period. But the payment terms have changed to 120 days due to hardships, and the customers sometimes can’t even meet those terms. “Sometimes it takes 300 days for them to pay for their purchases,” the executive said. “The automobile manufacturers don’t pay us, and we can’t pay our workers. As a result, we’re faced with serious problems in producing parts and tools. Automobile manufacturers don’t have money and they introduce parts builders to banks and they don’t pay the dividends in time. In such circumstances, the only option for employers is to shut down their companies.”
The Beshel executive said, “In Khorasah, Mazandaran, Tehran, Tabriz and Qazvin, more than 200,000 parts workers have been displaced. At the moment, due to liquidity problems, the country’s automobile industry is working at 50 percent of its previous capacity. Private parts builders are forced to let their workers go. The estimates are, if we don’t find a solution and can’t solve the problems of the automobile manufacturers and workers, the situation of this sector will further deteriorate.”
An Iranian regime official said, “Because of government pricing policies, the parts-building sector is no longer profitable, and many of the factories and companies are being pushed toward shutting down or firing many of their employees.”