GOVERNMENT MOTORS IS ACTING LIKE GOVERNMENT MOTORS – AT 8:46 A.M. ET:  GM, the Obama administration's experiment in near-socialism, is doing something very bad, but typical for a government-associated entity.  It is, in effect, aiding an enemy.  From an opinion column in the Detroit News, by Mark D. Wallace, a former US ambassador and CEO of United Against Nuclear 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.

COMMENT:  This is awful.  Unfortunately, there are also some ugly precedents.  There were major American companies, like IBM, doing business with the Nazis and the imperial Japanese, in the days leading up to World War II.  We famously permitted the selling of scrap iron to Japan on the eve of Pearl Harbor, scrap iron that came back to us in the form of bullets.  The Nazis made effective use of early IBM computer equipment.

Now we seem to be making the same mistake, despite advertising our "tough" sanctions on Iran.  The Obama administration could put a halt to this seeming deception by GM by making a few phone calls.  Will it happen?  Don't hold your breath.

June 14, 2012