The French Connection: GM-PSA Deal Will Bring Iran To Its Knees

Bertel Schmitt
by Bertel Schmitt

Now we know why GM bought seven percent of PSA, a move for which most of the industry had no explanation. Forget overcapacity and scale effects. It was a carefully crafted plan to bring traffic in the Iran to a halt. Stuxnet is nothing compared to this.

Today, management of France’s PSA Peugeot Citroen will meet and decide whether it will continue to cut off Iran Khodro from the supply of parts needed to build the 206 and 405 vehicles, Just Auto says. PSA confirmed that it had already stopped shipping parts to the Iran for the month of March.

After the linkup between PSA and GM was announced, TTAC asked how a still partially U.S. government owned company can live with the fact that one of its partners is providing aid, comfort and car parts to the enemy. A day later, an influential US anti-Iran lobby group called on GM and Peugeot to shut down Peugeot’s Iran business due to Tehran’s suspect nuclear program.

Mark Wallace, a former US ambassador to the United Nations and head of United Against Nuclear Iran group said:

“As a working partner and now official stake-owner of Peugeot, GM owes it to its investors and customers to compel Peugeot into ending its business in Iran. By doing business directly with the Iranian regime, Peugeot supports the regime’s ability to develop its illegal nuclear weapons program, support terrorist proxies and repress the Iranian people.”

Shortly thereafter, GM announced that PSA had suspended shipments of vehicle components to Iran Khodro and that its alliance with Peugeot “is fully compliant with U.S. law governing trade with Iran.” PSA will decide month-to-month whether to ship parts to Teheran, GM will make sure that it won’t.

With an annual capacity of a million cars, and with its 2011 production hovering close to capacity, Iran Khodro is by far the largest automaker in the Middle East. With a size comparable to Chery or Geely, Iran Khodro would rank at around place 20 on the worldwide scale of automakers, if it would rank. For some strange reason, Iran Khodro has been boycotted by or did boycott OICA for many years.

Iran Khodro (aka IKCO) has a long standing relationship with PSA Peugeot-Citroen, and France. Ayatollah Khomeini had lived in French exile and returned to the Iran on an Air France jet. France’s Total was one of Iran’s largest oil customers. The Peugeot 405 based Samand is known as “Iran’s national car.” IKCO also builds Peugeot badged iron like the 206, 405, 407 and a rear-drive Roa, a bizarre mixture of a 405 bodyshell with the rear-drive running gear of the Paykan, aka the Hillman Hunter. Iran Khodro is dependent on core components coming from France, an extended boycott could result in a breakown of its car production and in unrepaired cars after they had broken down. Iran had been busy establishing new suppliers in China, but even the Chinese complained for quite a while that payments from the Iran had become complicated. By now getting money in and out of the Iran is pretty much impossible.

I am sure the breakdown of Iran’s automotive infrastructure was an unintended consequence of the GM-PSA linkup, but I am confident that someone will claim credit and say that this was all part of the plan. Ironically, the Iran had threatened two years ago to stop parts imports and to bankrupt Peugeot. Someone finally implemented the plan, and it was not Iran.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

More by Bertel Schmitt

Comments
Join the conversation
3 of 12 comments
  • Benzaholic Benzaholic on Apr 02, 2012

    Bertel, you've definitely got more international experience than I do, but was it conscious effort or just rushed editing that left the article referring to "the Iran" so many times?

  • Pastor Glenn Pastor Glenn on Apr 04, 2012

    The USA harrasses a national enemy in every way possible, and this worked out just exactly how coming up to World War II? (I'm talking about Japan, which the USA treated in a similar fashion to how it is treating Iran now). Yes; I'm fully aware that the USA would most likely win WWIII. If living in a radioactive ash-heap could be consider 'winning'. Because it is well known that Iran has had nuke bombs for some 15 years, many of them purchased from 'scientists' in the prior Soviet union and (so-called) ex-Soviet 'republics'. Not to mention that Iran has a working relationship with North Korea - which has nukes. Perhaps giving trade a chance would work out for all concerned, instead of declaring economic war on Iran via the cutting off of global banking. I don't think global banking was even cut off for the Soviets during the cold-war, Japan or Germany in WWII, etc. As for Israel, they can take care of themselves well enough if there is an attack. (Of course, if Iran attacks Israel, Iran will be a nation of thick, green glass and not much else).

  • Mikey My late wife loved Mustangs ..We alway rented one while travelling . GM blood vetoed me purchasing one . 3 years after retirement bought an 08 rag top, followed by a 15 EB Hard top, In 18 i bought a low low mileage 05 GT rag with a stick.. The car had not been properly stored. That led to rodent issues !! Electrical nightmare. Lots of bucks !! The stick wasn't kind to my aging knees.. The 05 went to a long term dedicated Mustang guy. He loves it .. Today my garage tenant is a sweet 19 Camaro RS rag 6yl Auto. I just might take it out of hibernation this weekend. The Mustang will always hold a place in my heart.. Kudos to Ford for keeping it alive . I refuse to refer to the fake one by that storied name .
  • Ajla On the Mach-E, I still don't like it but my understanding is that it helps allow Ford to continue offering a V8 in the Mustang and F-150. Considering Dodge and Ram jumped off a cliff into 6-cylinder land there's probably some credibility to that story.
  • Ajla If I was Ford I would just troll Stellantis at all times.
  • Ronin It's one thing to stay tried and true to loyal past customers; you'll ensure a stream of revenue from your installed base- maybe every several years or so.It's another to attract net-new customers, who are dazzled by so many other attractive offerings that have more cargo capacity than that high-floored 4-Runner bed, and are not so scrunched in scrunchy front seats.Like with the FJ Cruiser: don't bother to update it, thereby saving money while explaining customers like it that way, all the way into oblivion. Not recognizing some customers like to actually have right rear visibility in their SUVs.
  • MaintenanceCosts It's not a Benz or a Jag / it's a 5-0 with a rag /And I don't wanna brag / but I could never be stag
Next