Union leaders who are frustrated with pressure from abroad and at home say some 450,000 workers employed by Iran’s auto parts industry are facing layoffs within a month. In the past few months, the country’s auto industry has witnessed a drop in production. In addition, a large portion of cars remain grounded in production lines while pending completion and then distribution in the market due to a scarcity of vital parts, according to economic daily Jahan-e-Sanat. 

This has not only created price turbulence in the auto market but has left the parts manufacturers in the red as well. Quoting union officials, Iran’s Labor News Agency said that with giant domestic carmakers failing to pay their debts to local auto parts companies, the latter are now being pushed toward bankruptcy.

The deputy head of the auto suppliers union blamed the central bank and the Finance Ministry for the situation. “The auto parts industry deserves condolences,” said Shapour Samei at a news briefing in Tehran Aug. 13. “The manufacturers are in hard times. In addition to laying off their staff, they have also reduced the working shifts.” According to Samei, currency fluctuations have further prevented stable production, reducing output by 40-50%. In a sarcastic tone, he added that “the central bank and the Finance Ministry had already begun their sanctions on the domestic manufacturers even before the United States started doing so.”

Another member of the union, Maziar Beyglou, warned that production could come to a halt in September. In that case, Beyglou said he would hold government institutions accountable for the looming job losses. Under a scheme to protect domestic production, the government of President Hassan Rouhani has backed several industries by granting them access to hard currency at the official rate of 42,000 rials per dollar. The auto parts makers say they have imported products at that rate, bypassing the much higher open market rate of 10,700 rials per dollar.