Aletho News


Iran sanctions force historic plant closure for Peugeot

Press TV – October 25, 2013

With European auto sales near a 20-year low, it’s unthinkable that an automaker would willingly cut ties with its largest foreign client. But in February 2012 Peugeot did just that by severing ties with Iran. The move was forced by its new partner, General Motors, which had just been bailed out by the US government.

The decision has cost an estimated €4 billion in lost sales and helped force 8,000 job cuts. In France’s first such industrial closure in two decades, the last car has just rolled off the line at a plant located in a heavily-Muslim suburb of Paris.

Via a partnership with automaker Iran Khodro, in 2011 Iran accounted for 13% of Peugeot’s annual sales. The cars were assembled in Iran, giving domestic autoworkers valuable experience and helping Iran to become one of the world’s top 20 auto-producing countries.

The French press has largely remained silent on the key role Iran sanctions have played in damaging Peugeot, despite pleas from union leaders.

Ironically, giving up the Iranian market seems to have been in vain, as multiple sources have reported that GM has significantly scaled back its alliance with Peugeot. If the sanctions on Iran were designed to inflict the maximum amount of pain on Peugeot, they may have achieved their goal.

October 26, 2013 Posted by | Economics, Wars for Israel | , , , , , , | Comments Off on Iran sanctions force historic plant closure for Peugeot

Iran Khodro says coping with Peugeot exit

Tehran Times | July 25, 2012

Iran’s main automobile company, Iran Khodro, says it is coping with a decision early this year by troubled French car maker Peugeot to halt exports of vehicle kits for assembly, according to reports on Wednesday.

“Iran Khodro has managed to become self-sufficient in producing 90 percent of the parts for the (popular Peugeot model) 206, and an effort is being made to use local suppliers for parts that were previously imported,” Hossein Najari, Deputy CEO for production was quoted as saying.

Peugeot’s parent company PSA Peugeot Citroen in February suspended its sales of car assembly kits to Iran, which had been its top export market in terms of trade volume up to then.

The decision appeared to be tied to Peugeot’s alliance with U.S. group General Motors, and U.S. sanctions pressure on Iran.

PSA Peugeot Citroen on Wednesday announced it will seek to cut 1.5 billion euros ($1.8 billion dollars) in costs over the next three years after declaring a 819-million-euro ($989-million) loss for the first half of 2012.

Its exports to Iran, where locally assembled versions of its 405 and 206 models are prevalent on the roads, represented up to 800 million euros in revenue per year before they were suspended, according to figures given in Tehran.

The maker of two-thirds of France’s cars is in a tailspin as a deepening recession in many markets in Europe takes its toll on its business — Europe is Peugeot’s main market. The company’s share price has more than halved since March.

The first-half loss contrasts starkly with a profit of €805 million in the same period last year and came on the back of a 5.1 percent fall in revenue to €29.6 billion.

The company doesn’t expect Europe to pick up anytime soon, saying Wednesday that it expects its European market to contract by 8 percent this year.

In response, Peugeot announced earlier this month that it would close a major factory in France and cut 8,000 jobs — part of a plan to save €2.5 billion by 2015. Those savings will also come from efficiencies gained by an alliance with General Motors. About half — €1 billion — of those savings will come this year alone.

“The group is facing a difficult time,” Chairman Philippe Varin said. “The depth and persistence of the crisis impacting our business in Europe requires the launch of the reorganization of our French production and a reduction in our structural costs.”

But the company’s cost-cutting plans have run afoul of President Francois Hollande’s Socialist administration, which has said the restructuring is unacceptable and that it will force Peugeot to save some of the jobs it wants to eliminate.

On Wednesday, the government will unveil a plan to support the auto industry — part of its carrot-and-stick strategy with Peugeot. It’s expected to give incentives to French consumers to buy French cars and to support the clean-energy vehicles that the company excels at.

But much of Peugeot’s problems stem from an over-supplied European car market, and it’s unclear how much the government can do for the company. France’s car industry was already given a bailout under former President Nicolas Sarkozy.

(Source: agencies)

July 25, 2012 Posted by | Economics, Wars for Israel | , , , , , | Comments Off on Iran Khodro says coping with Peugeot exit

Sanctions on Iran force French auto job losses

Iran market cannot easily be replaced for Peugeot: French union member
Press TV – July 18, 2012

A French auto workers’ union member says the country’s largest automaker Peugeot cannot find a replacement for the Iranian market after the company was forced to slash 8,000 jobs over Iran sanctions, Press TV reports.

“We have no sales not for economic reasons but for political reasons. The Iranian market is one that cannot easily be replaced for Peugeot. It’s an unacceptable decision for us,” Jean-Pierre Mercier from a closed Peugeot plant told Press TV.

Peugeot’s announcement on Thursday that PSA Peugeot Citroen would axe 8,000 jobs and shut the first car factory in 20 years has caused a political firestorm.

“If the state can prevent Peugeot from selling cars to Iran, why cannot they prevent these firings? Unfortunately, the unions insufficiently mobilized to tip the scale and stopped the embargo,” Mercier said.

Iran is Peugeot’s largest foreign customer, with half a million in auto sales translating into some several billion Euros each year. However, citing new banking sanctions, Peugeot ended cooperation in February.

Peugeot’s auto sales this year are down nearly a quarter of a million units, almost exactly the amount that Iran would have normally purchased.

According to reports, giving up the Iranian market might have been the price of Peugeot’s recent alliance with Detroit’s General Motors, owned by the US government, which has imposed sanctions on Iran for decades.

This is while Renault, another major French automaker, saw their Iranian sales double last year to 100,000 vehicles and they expect this number to rise.

July 18, 2012 Posted by | Economics, Wars for Israel | , , , , | 2 Comments