The severe financial trouble of Saipa automotive group was the main reason why the company needed a change in management, said an official with the Industrial Development and Renovation Organization of Iran (IDRO).
The wisest move at this point was to assign a financial expert to the position, Reza Norouz-Zadeh, head of the board of directors of IDRO, was quoted as saying by IRNA.
The remarks were made on the sidelines of the inauguration ceremony of Saipa's new CEO on Saturday during which Mehdi Jamali replaced Saeed Madani, the former CEO of the country's second largest automotive group.
The expertise of Saeed Madani, who held the position for three years, was mainly in technical and mechanical matters, the official said. Saipa, however, has been grappling with financial troubles and to address this issue, a change in management was inevitable.
The company's new CEO was formerly the CEO of Bank of Industry and Mine's leasing company, the Civil Servants Pension Organization and Iran Khodro Investment Company.
The financial status of the company is currently under investigation, Norouz-Zadeh said. The government will lend the needed support for Saipa to deal with the financial turmoil.
The official clarified that the company's technical plans will continue to be in place while adding that future issues to be assessed include price fixing and improving production quality.
Addressing the same ceremony, the company's new CEO said that due to his past experience he is thoroughly familiar with the challenges surrounding the auto manufacturing industry.
Touching on the issue of the current financial troubles of Saipa, the CEO stated that the company had fallen victim to mismanagement in recent years.
"Saipa's progress has been mostly hampered by lack of working capital," he added.
Jamali said that with the help of other affiliated organizations, several productive strategies have been put forth. He expressed hope that "the situation will change for the better once those strategies are implemented."
The official said that prior to his designation, he had been closely investigating the company's conditions.
"The ideas of factory workers, technical experts, and the company's engineers will all be invaluable for preparing an effective exit strategy," he stressed.
He also noted that with the help of a team of specialists, a long-term work plan is being formulated, the details of which will be made available in due time.
The current crisis can be overcome with the cooperation of auto part makers and the company can eventually win over the market, Jamali asserted.
Saeed Madani, the company's former CEO, clarified that he had submitted his resignation letter in November 2014, when "the company's conditions were relatively stable."
The company had been searching for an efficient manager before accepting his resignation letter, he said.
"Saipa is in dire straits," Madani warned while blaming the company's poor management during the two terms of former president Mahmoud Ahmadinejad as the main ill that had crippled the industry.
"It was during the same period that nearly 150 auto part makers refused to continue cooperating with the company and Saipa put a halt to the projects at its research center."
Madani said the company could benefit from the vim and vigor of a younger management.
