The New Blunder of Mayor Zakani
The new blunder of Mayor Zakani appeared on a municipal advertising banner at metro stations, which was designed to explain the reason for purchasing products from abroad. In response to the question of why we bought foreign and the defense of equipping the transportation fleet with imported products from China, it was written: Lower price compared to similar Iranian models, the ability of the Chinese company to meet Tehran’s needs in a six-month period, the snail’s pace of domestic car manufacturers in building the urgent and vital need for Tehran’s new public transportation fleet, reducing the capital’s air pollution with the quick entry of electric fleets and reducing gasoline consumption with electric buses and taxis in the country.
According to Iran Gate, ILNA wrote that the humiliation of domestic production precisely in the years named after supporting domestic production, especially by a public institution close to the government that chants revolutionary slogans, has been strange for many and raised the question of how much the work and labor of Iranian workers matter to various officials.
The increase in talks and rumors about the import of certain foreign products into the country, including automotive and diesel products, has become very controversial in recent days. These controversies continued to the point where the Tehran Municipality, as one of the ordering and consuming bodies of vehicles and diesel vehicles like buses and minibuses, became a supporter of imports.
The discussions and analyses of critics regarding the Tehran Municipality’s action, including the views of Alireza Zakani, the Mayor of Tehran, progressed to the extent that the advertising and cultural arms of the municipality in Tehran recently defended the decision of this organization to import automotive and diesel products from countries like China by installing banners and advertising boards in environments such as the metro.
Such actions, accompanied by the humiliation of domestic production precisely in the years named after supporting domestic production, especially by a public institution close to the government that chants revolutionary slogans, have been strange for many and raised the question of how much the work and labor of Iranian workers matter to various officials.
On the municipal advertising banner at metro stations, designed to explain the reason for purchasing products from abroad, in response to the question of why we bought foreign and the defense of equipping the transportation fleet with imported products from China, it was written: Lower price compared to similar Iranian models, the ability of the Chinese company to meet Tehran’s needs in a six-month period, the snail’s pace of domestic car manufacturers in building the urgent and vital need for Tehran’s new public transportation fleet, reducing the capital’s air pollution with the quick entry of electric fleets and reducing gasoline consumption with electric buses and taxis in the country.
These claims, however, have often been refuted in interviews with some private and state-owned domestic manufacturers. Many of these employers, because they still had contracts with some government agencies and some municipalities or hoped to secure contracts in the future, refrained from directly responding to these claims.
Nevertheless, most of the technical and economic claims printed by the municipality on this banner have been refuted by them.
However, the fundamental reason for such an approach must be understood. If the issue is a kind of interaction with the foreign policy apparatus to obtain compensation for oil sales in the form of product barter, this matter is more acceptable to the Iranian producer, worker, employer, and citizen if stated honestly. But the arguments and the manner of confrontation are considered by automotive industry analysts and labor relations as a form of self-belittling of domestic production.
Regarding this issue, some employers provide a picture from above for the audience. For example, Bahram Shahriari, a member of the board of directors of the Iranian Automotive Parts Manufacturers Association, regarding the recent municipal advertisements on the issue of imports and in response to the claims made by them, says: We domestic manufacturers, whether in the field of personal cars or public and diesel vehicle fleets, have both the capacity and the actual ability to produce and meet domestic needs, but what is lacking is management.
He added: This determination and this program do not exist in the country to supply the need from within through a pre-ordering process and by providing production conditions. We have repeatedly said and raised this issue that as long as the country’s automotive industry is monopolized by the government and the government does not allow other activists to enter its various fields, no significant event will occur in this area.
All the inadequacies stem from this governmental monopoly in the automotive field.
Shahriari continued: Exchange rate fluctuations and issues like this have disrupted the work of employers in the parts and automotive manufacturing sector in the country.
For example, we receive orders for bus parts with the latest quality and have the ability to produce them, but as soon as some imported or even domestic items, which are somewhat dependent on the exchange rate, are ordered, until the time of assembly and production, we experience several price changes and suffer losses in between. New taxes and various other pressures, along with this issue, have created hundreds of obstacles for production, the source of which is the government.
This automotive and parts manufacturer continued: It is not that this will and ability does not exist in the domestic manufacturer. Both technically and design-wise, as well as economically and industrially, the capacity exists in the country to supply all orders for public vehicle fleets and parts for all vehicles with domestic production.
He emphasized: The problem starts where, in the discussion of car imports within the government and state companies, a conflict of interest arises and from there production gets hit, as we witness that even our own large state-owned car manufacturing companies have joined the ranks of importers.
This employer activist concluded: Alongside all these problems, the government and institutions support imports, which themselves have a very high volume of debt to the parts manufacturers and private sector car manufacturers in the country. And if they claim that domestic car and parts manufacturers cannot make progress, they should first pay the astronomical debt of the government, affiliated companies, and quasi-state companies to us and then make such claims about the incapability of domestic manufacturers.
Shahriari, however, did not comment on the final figure mentioned in the production of government and state company debts to private car and parts manufacturers in the country, but the last figure presented in the spring of last year was more than 70 trillion tomans, which, when combined with the debt of quasi-state companies and other non-governmental car manufacturers in mid-2023, should certainly have reached more than 100 trillion tomans of debt to domestic parts manufacturers.
Despite all the problems in the automotive sector, especially diesel products, the workers and their risk of unemployment in production companies are one of the secondary consequences of the tendency to import products that have domestic equivalents, and as a result, workers also have concerns from this perspective.
On-site observations from two diesel vehicle manufacturing companies last year show that production in most of these companies was carried out at low capacity, and recession has overtaken these manufacturers, who mostly turned into complete assemblers due to the specific market conditions.
Nevertheless, workers are more concerned about the industry and the country’s foreign exchange resources than their job security. Mojtaba Hajizadeh, the head of the Automotive Industry Workers Union, explains in this regard: Those who were active in the 13th presidential election and later took on important positions like the Tehran Municipality and the leadership of strong economic foundations came to power with national and revolutionary slogans.
They made slogans about automakers, inflation, and production improvement that, since they did not succeed in them, needed a promotional project to show themselves as successful.
He added: Some officials had a very easy view of managing car production in the country, and now that they have seen the difficulty and complexity of the work up close, their view has changed. Now they want to say that we want to do something in practice and among all these ways, they chose imports.
Hajizadeh stated: The initial question is whether the municipality can essentially act as an economic entity to import and contract abroad when we have a diesel fleet and diesel public transportation products in the country. What legitimacy does a foreign contract by any municipality in the country have, especially when it is contrary to the supreme leader’s macroeconomic policies?
The head of the Iranian Automotive Industry Workers Union stated: Every import has a profit margin for some people, and certainly, there has been a conflict of interest and a profitable relationship that preferred this deal to domestic production. The balance of power between the part that profits from production and the part that profits from imports has been disrupted, and this is a warning sign.
This labor activist emphasized: In 1999, we unveiled a number of domestically produced Jeeps at an exhibition, 2,100 units of which were produced. At that exhibition, all 2,100 Jeeps produced were pre-sold at the international exhibition, and not a single unit reached domestic customers.
In such a situation, with this technical capability, how can the municipality claim that we did not have the technical and economic ability to produce and hindered the municipality?
Hajizadeh added: If the municipality needed diesel vehicles and a transportation fleet, it should have informed the responsible authority, which is the Ministry of Industry, Mine, and Trade, and that ministry would have determined for the municipality through expert work whether the vehicle should be imported for the city or if it could be produced domestically.
We all know that the municipality cannot have mastery over automotive issues and their technical challenges, and certainly, there is a division of labor in the country that must be observed.
He pointed out that everyone knows that domestic production, for which much less foreign exchange is spent, is cheaper than foreign production. He said: Our standards, roads, and streets, and the shape of the interior of wagons and buses in heavy passenger transport are completely different from other countries, and our domestic diesel industry has essentially been formed to meet the specific needs of this market shape and has become accustomed to producing for specific fuels, designing the product accordingly after much experience and trial and error.
In such conditions, what logic justifies reinventing the wheel from scratch?
The head of the Automotive Industry Workers Union stated that for the automotive mafia in the country, the issue of domestic labor employment does not matter. He said: It seems unlikely that, given the social and security consequences of laying off 250,000 direct workers of state car manufacturers in the country, anyone would have the ability or courage to bring down the great automotive industry of Iran, but weakening the labor force, especially in the diesel vehicle sector, is not justifiable.
This labor activist acknowledged: The municipal officials made promises to the people that they could not fulfill, but now they intend to make themselves known by blackening and self-belittling domestic production. They might also make populist and demagogic slogans in the future, saying that we wanted to import, and the automotive mafia did not allow us to meet the city’s needs, whereas this claim is irrelevant given the current power of the municipality.
He added: In the entire Middle East, North Africa, the Indian subcontinent, and Central Asia, the only country that has the automotive industry from the design and parts manufacturing stage to assembly is our country, Iran. In these seventy years, although there is dissatisfaction with the automotive industry, our people are opposed to the destruction of this longstanding and deep-rooted industry, and most people’s dissatisfaction is due to the high and illogical profit margins of our automotive products.
We have addressed domestic needs in the automotive and diesel sectors for years and have put our efforts into it.
Hajizadeh emphasized that among various global competitors, due to sanction conditions, we were forced to choose China. He said: Due to China’s veto power and economic strength, we are compelled to choose this foreign seller and probably have to barter products in exchange for oil.
This is while domestic vehicles are both cheaper and, unlike foreign models, have much cheaper and domestic spare parts and accessories. Among the officials, they must choose to focus their foreign trade share with China in this area or spend it in another area.
This labor activist concluded: In diesel vehicles, especially buses, for every imported unit, seven complete sets of spare parts for the same vehicle, such as mirrors, screws, handles, and according to the standard, must be imported into the country. This is while, if purchased domestically, all these parts would be fully produced internally without the need for imports, and foreign exchange would not leave the country.
The pain is that when criticism of the advertising billboard arises, even the institutions of this municipality ultimately do not blame themselves for insulting our domestic production. Tomorrow, if the second-hand electric buses imported from China turn out to be faulty, even Tehran Municipality will not be accountable.