The vast majority of Holden dealerships have accepted a compensation offer from General Motors in exchange for breaking their franchise agreements and exiting the Australian and Zealand markets.
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to “front up to the Senate Inquiry and answer a range of questions, such as when they first knew that Holden would be withdrawn, why they mislead dealers and consumers about their commitment to Australia, why they refused fair compensation to Dealers and the details of its new General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.”
Comments
Another market that GM the one time market leader there has stuffed up and retreated from. Why is it they can’t succeed in so many countries?
While I agree mfg in Australia is probably too costly (importing parts to assemble and paying employees to do it, plus assembly facilities, taxes, utilities, etc… ) , and to my knowledge auto mfg is dead there, it just makes more sense to import. That said these business owners have little choice but to accept what they’ve been offered and move on with their lives…
It is too bad that GM pulled the plug. I have a G8 GT and a GTO and both are great vehicles. I would another car produced there. CARS are become a thing of the past, with trucks and SUVs the only thing available. Sure you can buy a Vette or a Camaro, which are fine for weekend driving. I will take my 2 Holden/ Pontiacs and keep them running.
Thanks,
Big AL
Who actually remembers Humber or Hillman, Riley, Daihatsu or even Austin? Time forgets companies that ultimately fail and in twenty years if you ask a 15 year old kid what is Holden you will get a blank look unless his father of grandfather is a rev head!
I’m showing my age, but I recall every one of those brands you mention, and more. Hudson, Studebaker, DeSoto, Nash, Kaiser/Frazer, Jeep when it was Kaiser, Rambler, Simca, Panhard (an uncle had 6: one to drive and the rest were parts donors).
sad but the Auto unions in Australia are to blame for their domestic production ending ! they were too greedy! OMG, even a lowly busboy/waiter that country gets $25 per hour to start !
the autoworkers were paid too much and it became too expensive to build there !
simple economics,
the auto companies all build cars in USA now even export them !
they found a economic model here that made sense and built factories in non-union states !
yes the workers do not get high wages , but at least have jobs ! and their pay is above the average !