Citizen GM

From Wednesday’s Detroit News:

Commentary: Why is U.S.-owned GM partnering with company that does business with Iran?

Earlier this year, GM announced a new partner: French automotive giant PSA Peugeot Citroen (Peugeot). While many are still speculating about the financial implications of this trans-Atlantic alliance, there is no doubt that from a foreign policy perspective, it is problematic, and raises numerous questions that GM is unfortunately refusing to answer.

My organization, United Against Nuclear Iran, learned of the GM-Peugeot partnership earlier this year, as well as GM's subsequent acquisition of a 7 percent share of Peugeot. This concerned us greatly, since Peugeot was actively doing business in Iran — a nation run by a brutal regime that is allied with al-Qaida, has killed dozens of U.S. troops in Iraq and Afghanistan, plots terrorist attacks on U.S. soil, and is illegally pursing nuclear weapons.

The facts are beyond dispute: Peugeot is partnered with Iran's Khodro Group, a subsidiary of an entity — IDRO — controlled by the Iranian regime and associated with Iran's brutal Islamic Revolutionary Guard Corps. Over half a million Peugeot vehicles were sold in Iran in 2010 alone, making Peugeot the leading foreign auto manufacturer produced and sold there. Peugeot has more expatriate employees working in Iran than any other western company.

UANI respectfully raised these concerns in a March 9 letter to GM Chairman and CEO Dan Akerson, asking that GM "use its influence and leverage to compel Peugeot to immediately end its business in Iran."

"In the event Peugeot does not comply," we added, "UANI calls on GM to end its partnership with Peugeot."

In response to UANI, a GM spokesman, Greg Martin, told Agence France-Presse that Peugeot has "halted its business dealings with Iran." GM also told the Wall Street Journal that Peugeot had "made the decision to suspend the production and shipment of material into Iran some time ago."

These would ordinarily be welcome and reassuring statements. However they simply do not jibe with reality.

According to industry data, in the last year, ending March 19, nearly half a million Peugeot vehicles were produced in Iran — some 38,000 in the final month alone. On April 15, a report out of the Middle East read, "Iran's largest carmaker Iran Khodro Company branch in Fars is scheduled to produce 15 thousand Peugeot Pars sedans." Another, on April 19, said that Peugeot's Iranian partner "has not yet received any official announcement from Peugeot indicating a halt in their mutual cooperation."

In fact, the very article in which Martin was quoted included a contradictory statement from a Peugeot spokesman, who said that while Peugeot had halted March and April shipments, the larger decision about ceasing business in Iran was being taken "month by month." Similarly, a report in Just-Auto last month quoted a Peugeot spokeswoman saying Peugeot had suspended Iran shipments until July, but is considering resuming them in September.

We are always open to new information or explanations but, faced with the facts, it is hard not to feel like GM and Peugeot are simply trying to make this controversy go away without making the responsible decision to truly end their business in Iran.

The tragedy is that Peugeot's business with Iran's regime and military has been occurring just as the U.S. and its allies are trying to economically isolate Iran and pressure it into changing course. Hundreds of companies have pulled out of Iran, either voluntarily or as a result of sanctions, including automakers Porsche and Hyundai. Both informed our organization this year that they ended their business in Iran, and we were happy to applaud them for their responsible decisions. Companies that remain in Iran, however, provide the regime with a lifeline it uses to stay in power and finance its nuclear program.

In light of the taxpayer-funded $50 billion bailout of GM and the U.S. Treasury Department's current 32 percent stake in GM, it is completely unacceptable for GM to be financially aligned with a company that is doing work with a regime responsible for the deaths of U.S. servicemen. The GM-Peugeot partnership seems to run afoul of U.S. sanctions, and it should be investigated. We call on Sen. Carl Levin, D-Detroit, chairman of the Armed Services Committee, to hold GM accountable for whom it partners with.

And we again call on GM and Peugeot to take the responsible action of evaluating Peugeot's business in Iran, and putting a complete and final end to it.

Mark D. Wallace is CEO of United Against Nuclear Iran. He served as U.S. ambassador to the United Nations, representative for U.N. management and reform.