Why the Revolutionary Guards will fail Iran’s car industry

INVOLVED IN THIS ARTICLE:

Iran Air

Iran Air

Saipa Corporation

Saipa Corporation

Brigadier General Qassam Soleimani

Brigadier General Qassam Soleimani

IRGC – Islamic Revolutionary Guard Corps

IRGC – Islamic Revolutionary Guard Corps

For more than a decade, Iran’s state media has been highlighting the role the Islamic Revolutionary Guard Corps (IRGC) has played in the country’s automobile manufacturing industry. In the beginning, it was all about the Guards’ purchase of of shares in the Iran-Khodro and Saipa manufacturing companies, but, over the last two years, there has been a new angle.

On Tuesday, June 9, 2020, Amir Ali Hajizadeh, the commander of the Aerospace Force of the IRGC, held a meeting with the Minister of Industry, Mines, and Trade, during which he officially announced the IRGC’s collaboration with the automotive industry, which he described as a process of “enhancing the quality,” “economizing,” “reducing fuel consumption,” and “localizing the industry.”

The meeting came just three days after Ayatollah Ali Khamenei implicitly ordered the collaboration. During a televised speech, he said: “If we can make such big moves in the military with the launch of space satellites, why can’t we produce a car that requires only five liters of gas to travel 100 kilometers? Why should we stop at making vehicles that use 12 liters or 10 liters or eight liters?”

So what will happen next, now that the IRGC is officially involved in the country’s automotive industry? Can the approach used in the missile industry work for cars? Could this bolster Iran’s car industry, or could this strategy be cause for concern? Is there something else going on behind the scenes? After reaping the rewards of the construction, oil, gas, roads, and dam construction sectors, is the IRGC positioning itself to take over the car industry?

First it’s worth looking at whether the success of the missile industry can be translated to car manufacturing. For the Islamic Republic’s biggest supporters, this is not a presumption but a final verdict. For these supporters, the construction and unveiling of various types of military missiles and sending satellites into the Earth’s orbit are signs of the IRGC’s success at a time when almost all of Iran’s industries are in the throes of bankruptcy.

But for more neutral observers, this assumption has not yet been proven. That’s because the details of Iran’s missile program are not publicly available. It is not clear that all the equipment and parts used in the missiles and weapons are made in Iran. How are they designed? How up-to-date are these equipment and products? Are some of them copies of equipment built by other countries, and are some of them based on old models of these products?

For example, in August 2018, Iran unveiled the Kosar fighter plane as being Iran’s first domestically-produced military aircraft. However, according to research published on the Fact-Nameh website, experts have identified the plane as a copy of the F5 aircraft based on US-grown technology from 50 years ago.

Available information about Iran’s missile and military technologies is so sparse that it is impossible to make an independent judgment regarding their qualitative success. Proponents of the IRGC see its bombardment of the Ayn al-Asad military base in Iraq in retaliation for the United States’ killing of Ghasem Soleimani as evidence of the quality of Iran’s missile industry. And yet, a passenger plane, Ukrainian International Airlines Flight 752, was shot down at the capital’s airport using the same missiles. How can Iran’s airspace authorities be labeled as “successful” when they were responsible for downing a plane and killing 176 people because they were unable to detect a passenger plane at an international airport? How can the IRGC’s aerospace unit be considered a qualitatively successful organization when it cannot cope with the basics of air defense?

Even if it could be assumed that the IRGC has had technical success and experience in building missiles and military equipment, what is the cost? How much money has been spent on building Iranian satellites and missiles? Upon scrutiny, is it fair to say the Revolutionary Guards missile project has been an economic success? It is impossible to determine exactly how much money is spent annually on the construction of IRGC missiles, and, crucially, what percentage of it is financed from the public budget and what portion from the IRGC’s internal resources, The Guards’ Khatam al-Anbiya Construction Headquarters has yet to publish a clear financial report, so how can one expect transparency from the automobile industry under the Guards?

But even if one ignores the issue of transparency, another question comes to the fore: Does the Revolutionary Guards Corps have a track record of delivering public services? Missiles are not public, everyday commodities, their flaws have not been made public and, anyway, the IRGC does not consider itself to be accountable for missile production. So can this model be implemented in the automotive industry as well? If people are not satisfied with IRGC-produced cars, will the IRGC interact with the public and understand its problems, or will it respond to the public the way it responds to its critics? How can an organization that refuses to tolerate a memorial service for the victims of Ukrainian Passenger Flight 752, which was brought down by Revolutionary Guards’ missiles, be a good provider of public services?

Imagine if, as the production of cars gets underway, people begin to need parts and they happen to be unavailable. If they complain to their dealers, will people be targeted by the Guards’ intelligence agents? Will they face legal recourse for voicing their frustration?

At the moment, Iran’s automotive industry suffers from severe structural and economic problems. A state monopoly, lack of competition, lack of transparency and corruption are all important factors in its current crisis. With the official arrival of the IRGC in the industry, none of these problems will be solved. In fact, the Iranian people will witness a more entrenched monopoly, an even further isolated market, less transparency, and more corruption.

Source » iranwire

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