The Regime confesses
An advisor to the labour minister admits in an internal report that 1,350 companies were facing problems and 171 companies were in a critical state as of September 2018. Most of these companies are in the automobile parts industry.
One unidentified 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.”
Even state-run media is reporting that Iranian Regime officials are admitting that the country’s industrial sector is in a sorry state, with the head of Iran’s Association of Parts Builders saying that between March and October, 100,000 parts workers lost their jobs; a figure that could rise to 400,000 “if fundamental changes aren’t made”.
But this is not the full extent of the crisis, as the Iranian Regime’s media is even warning that 450,000 parts workers may soon be made unemployed, which signifies a major problem in what is one of Iran’s largest industries. That figure is just over half of the 800,000 people currently employed in the industry, meaning that production would halve and many orders may not be able to be met.
What are the companies saying?
Beshel Company is one of Iran’s main manufacturers of automobile parts since 2016. It used to produce 1,300 engine cylinders and cylinder heads every month, but production reduced to 350 cylinders per month in 2018.
An executive from Beshel advised that their customers also used to pay within 90 days, but due to the dire economic situation, the payments agreement shifted to 120 days. However, for some, even that is too much and Beshel is waiting more than 300 days for payment.
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 reported that more than 200,000 parts workers have been made unemployed in Khorasah, Mazandaran, Tehran, Tabriz and Qazvin and that the automobile industry is working at half its previous capacity
The executive said: “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.”