If Saipa's management and ownership structure is not reformed as soon as possible, this major car manufacturer will face a bankruptcy crisis / Saipa has been engaged in "futures selling" and obeying command hierarchies for years.

Mehdieh Ahmadi, Secretary of the Homogeneous Specialized Association of Powertrain and Automobile Parts Manufacturers of the country, said: If the management of SAIPA only thinks about the organizational interests and the interests of the stakeholders, instead of the government's method, the answer will be found. The post If Saipa's management and ownership structure is not reformed as soon as possible, this major car manufacturer will face a bankruptcy crisis / Saipa has been involved in "futures selling" and obeying hierarchical orders for many years appeared first on Safir Arjan.

According to Ambassador Arjan, governments in Iran have not had a good track record in managing economic-industrial enterprises, and their entry has led to the emergence of fundamental challenges in the process of production and productivity. At some points, some statesmen have left behind brilliant records, but in the macro, the management of governments has not had any fruits in the economy of these companies.

Large automobile companies with accumulated losses that they have had over several years are practically bankrupt enterprises; But governments have always covered this issue by creating solutions. Today, the orange-covered road has become one of the problems of the 14th government, and the actual privatization process is in an aura of uncertainty.

The increasing loss in Saipa is the product of a non-optimal management and influenced by the orders from above.

Arash Mohebinejad, Secretary of the Specialized Association of Homogeneous Powertrain Industries and Automobile Parts Manufacturers of the country, in a conversation with Ambassador Arjan, seriously criticized the performance of SAIPA in recent years, and considers the main root of the problems of this large economic enterprise to be "government administration" and extra-organizational interventions in macro policies.

Pointing out that the increasing loss in SAIPA is the product of a non-optimal management and influenced by orders from above, he stated: "Unfortunately, SAIPA has been involved in "futures trading" and obeying orders for years instead of following economic principles. If the management of this company, instead of obeying the political pressures and MPs in the discussion of dismissals and installations, was managed based on the correct principles of private entrepreneurship and protecting the interests of the stakeholders, we would not have seen the current situation.

He added: If this car manufacturer had a turnaround and followed economic principles, it could have been saved from this disaster despite all the problems.

He continued: The most important economic principle that SAIPA did not pay attention to was that it should produce above the break-even point in terms of circulation, so that at least it does not lose more than this and gradually get out of this abyss. But an economic giant like Saipa, when it is with a number of government employees who only get a salary and see their responsibility towards the superior authority, and the beneficiaries are the ordinary people of the society and the general public, then the profitability of economic and business principles is abandoned and replaced by the hierarchy of management orders.

There are more than 36 organizations involved in the auto industry that issue conflicting orders

Stating that there are more than 36 organizations involved in the automobile industry that issue contradictory orders, this trade union official clarified: the country's automobile industry is like a straw on the raging waves of repulsive and uncoordinated and sometimes contradictory policies. The absence of a single command has caused the management of state-owned companies to undergo political turmoil and unable to adopt the necessary strategic and defensive positions against the surrounding pressures.

He reminded: On the other hand, an economic enterprise that is private takes clear, correct and timely positions against these surrounding changes and defends its right where it should. But in SAIPA group, we don't see these defensive positions against wrong policies.

Mandatory pricing is a threat to the automotive industry

The secretary of the Specialized Association of Homogeneous Industries of Motive Power and Automobile Parts Manufacturers of the country called the mandatory pricing a shot at the body of this industry and clarified: This wrong policy is communicated from the upper authorities to the Minister of Industry, Mines and Trade (Samat) and from there to the car manufacturer. The managers of Saipa, who are demanding and can be ordered, have caused not only no profit to be made with every vehicle that is sold, but also added to the company's accumulated losses.

Between 1403 and 1404, Saipa's loss increased by 60 hems / in the first 6 months of 1405, Saipa's production showed a 46% drop compared to the same period of the previous year.

He added: In the end, the effect of this loss on the performance of an economic enterprise like Saipa will be two issues; One is a functional increase of 60 thousand billion tomans (Hamt) of Saipa's losses between 1403 and 1404.

In the continuation of his speech, this activist of the country's automobile industry pointed to the second issue and the liquidity crisis in this economic enterprise and said: in inflationary conditions, liquidity is the blood in the veins of the enterprise, and to maintain production circulation, it must increase in proportion to inflation; But in Saipa we see the opposite of this issue.

He went on to say: perhaps the caution of the government managers or their obedience to the orders of the superiors on the one hand and the series of previous wrong decisions and policies that the managers and the current minister are the inheritors of, if they want to prevent the activity of the previous cycle without planning and planning, the cycle will stop moving.

Stating that the output of this mismanagement is also evident in the Riyal figures of this automobile company, Mohibinejad said: In the first 6 months of 1405, the production of this company shows a 46% drop again compared to the same period of the previous year.

By ending the mandatory pricing and entrusting the management of Saipa to the private sector experts, the ground to return to the break-even point and exit from this abyss of losses should be provided.

He emphasized: This downward trend has made both the customers dissatisfied due to the lack of timely delivery of the cars and the shareholders of the company facing a serious challenge that they cannot make a profit. It is necessary to end the command pricing and entrust the management of the company to the private sector specialists, to provide the ground to return to the break-even point and get out of this abyss of losses.

Instead of focusing on economic indicators, quality and circulation of production, the government administration of Saipa has become involved in political drawing.

In another part of his statement, Mohibinejad criticized factional and political approaches in Saipa's macro management and stated: Instead of focusing on economic indicators, quality and circulation of production, Saipa's government management has become involved in political lines (left and right). In the last two years, the specialized organizations and associations of the private sector have presented numerous proposals and expert solutions to the Ministry and the directors of SAIPA, but the structural limitations of the public administration have prevented these voices from being heard.

Comparing the situation of the country's two largest car manufacturers, he added: "If Iran Khodro had not been privatized, it would have been in a much worse situation than Saipa today."

This union official continued: If the management of Saipa, instead of the government's method, which is actually the hierarchy of its superiors, to keep him satisfied, only thinks about the organizational interests and the interests of the beneficiaries, who are mainly ordinary people, whether as customers or as shareholders of the stock exchange sector, it will be answered and think about increasing production circulation, solutions to compensate the liquidity deficit, avoid accumulated losses, fight to get the rights and rights of a company like Saipa, ensure the satisfaction of people and customers, and improve the quality of growth. The production and finally the fulfillment of the obligations falls on its own time.

Saipa's production has reached about a quarter of its potential capacity and facilities

The Secretary of the Specialized Association of Homogeneous Powertrain Industries and Automobile Parts Manufacturers of the country, referring to Saipa's high performance drop, said: Saipa once ranked first in the Middle East in terms of production volume, but unfortunately today, due to wrong policies compared to 2013, the company's production has reached about a quarter of its potential capacity and facilities. If this trend is not corrected, we will witness an irreversible decline.

Mohibinejad considered complex laws and cumbersome bureaucracies as other factors paralyzing the auto industry and said: In addition to the necessity of definitive privatization of Saipa and the auto industry, the troublesome regulations must also be amended. Things like the defects of the comprehensive trade system, excessive bureaucracies and unnecessary complications in the process of allocating and providing foreign currency in the worst conditions of sanctions and war, not only do not help domestic production, but are also hindering it.

Before these incidents happen, the officials should think about the current structure and management reform of this company

In summing up his words, this trade union official reminded: If the management and ownership structure of Saipa is not reformed as soon as possible and its management does not think about the interests of the beneficiaries, small shareholders and customers instead of satisfying the superiors, this big car manufacturer will face a bankruptcy crisis. In that case, the demands of creditor people, bankrupt component manufacturers and the multitude of complaints against SAIPA can become a big security and economic problem for the country; Therefore, we hope that the authorities will take root in the thought of reforming the structure and management of this company before these incidents occur.