Holden could face court action

GM Holden could find itself in court facing prosecution by the Australian Competition and Consumer Commission (ACCC) over its compensation negotiations with its dealers.

Speaking today as a witness at a Senate inquiry into axing of Holden by General Motors, ACCC executive general manager of enforcement Rami Greiss confirmed it was following up dealer allegations against General Motors.

Greiss said the investigations had the highest priority and should be finished this year.

“We are in the middle of an investigation at the moment looking into issues or allegations of unconscionable conduct and deceptive conduct levelled against General Motors Holden,” Greiss confirmed.

“We are assessing evidence, assessing complaints to see if there is a matter actionable under the competition and consumer act and the Australian Consumer Law (ACL).”

NSW Holden dealer Mark Palmer told the inquiry today the compensation offered by GM for cutting his dealer agreement short by more than two years was non-negotiable and he was placed under extreme pressure to accept what he regards as an unfair deal.

Greiss said other dealers had made similar complaints to the ACCC.

“We definitely have heard concerns of that nature from other franchisees.

“I understand that many of the Holden dealers were not happy about the offer of compensation and the total package.”

It has also been alleged GM encouraged Holden dealers to make large capital investments while being aware it was pulling out of Australia.

“We are looking into that,” said Greiss.

Another potential concern is the service and repair deal offered to dealers for the next five years is specifically stated not to be a franchise agreement.

“I think we would have to just point to our current investigation and all potential matters that might be a breach of either the ACL or the competition and consumer act would be reviewed during the course of that investigation,” said Greiss.

The ACCC has acted as a watchdog throughout the fractious negotiation between Holden and its 185 dealers since the February 17 announcement of the brand’s axing by General Motors.

It intervened to force GM to go to mediation with the dealers and extend its deadline for the dealers to accept its compensation from the end of May to June 30.

More than 90 per cent of dealers have now accepted the compensation offer, which was never modified from the time GM Holden first revealed it in late February.

Separately, the ACCC also questioned whether GM Holden’s 10-year service and repair commitment to Australia past the closure of the brand was adequate.

“It’s something we intend to monitor of course,” Greiss said. “The ACCC is certainly of the view 10 years may not be sufficient but it is hard to be any more specific than that at this point in time.”

Greiss said the ACCC hoped to wrap up its investigation before the end of 2020.

“These investigations are quite involved and complex and often it’s hard to really judge how long it will take to obtain evidence from those who are alleged to have engaged in the conduct or third-party witnesses.

“But with that caveat we are certainly giving these investigations the highest priority and we expect to have a public outcome this year – either proceedings or an announcement that we haven’t found any actionable conduct.”