According to Motoring.com.au, 120 of the 185 separate Holden dealerships operating in Australia and New Zealand agreed to GM’s compensation offer for this week. While the Australian Holden Dealer Council (AHDC) had previously objected to the automaker’s compensation offer, which is equivalent to around $1,500 per new vehicle sold over a specified time period, many dealers eventually caved in the legal battle. The remaining dealers who did not accept the offer intend to continue their legal fight with the automaker, AHDC secretary David Nicholson said in a statement.
“With great reservation and reluctance, more than 120 dealers have now accepted GM’s compensation offer,” he said. “The remaining brave dealers will continue to take the fight to Detroit.”
Nicholson also said GM representatives refused “to negotiate in good faith, making a mockery of mediation,” and blamed lax Australian business regulations for letting GM get off the hook from its franchise agreement with AHDC dealers.
“Weak regulations, heavily favouring the multinational franchisor, have effectively allowed (GM) to walk away from their agreements leaving dealers with empty showrooms and millions (of dollars) in losses,” he said.
GM has remained adamant that its compensation offer is fair and says the offer is equal to “over four times what the average dealer made in the new vehicle department,” within the effective timeframe.
While GM will not have to provide additional compensation to two-thirds of Holden dealers, it must still face the Australian government over its sudden decision to withdraw from the country. A Senate Inquiry into the automaker’s decision, which will kick off next month, will include public hearings involving GM executives.
Australian Automotive Dealer Association CEO James Voortman said GM’s senior management team will need to “front up to the Senate Inquiry and answer a range of questions, such as when they first knew that Holden would be withdrawn, why they mislead dealers and consumers about their commitment to Australia, why they refused fair compensation to Dealers and the details of its new General Motors Specialty Vehicles business.”
The AHDC also said this week that the Australian government needs to step in and “strengthen its automotive franchising regulations to protect local businesses against the heavy-handed behavior of some car manufacturers.”