More than 120 Holden dealers accept GM compo offer

More than 120 of Australia’s 185 Holden dealers have signed up to General Motors’ compensation offer for axing their franchise agreements.

The figure was confirmed by the Australian Holden Dealer Council (AHDC), which has fought a bitter battle with General Motors over compensation leading up to today’s deadline.

It is understood very few dealers had signed up to the compensation deal ahead of the June 30 5pm deadline. But such has been the adversarial nature of this negotiation, it was always going to be pivotal.

The AHDC said in a statement the dealers that refused to sign would continue to fight, indicating a legal challenge that could take years and cost millions of dollars could be the next step.

“With great reservation and reluctance, more than 120 dealers have now accepted GM’s compensation offer. The remaining brave dealers will continue to take the fight to Detroit,” AHDC secretary David Nicholson said in the statement.

While the matter may now be resolved as far as GM is concerned, it has the potential to become evening news fodder with a Senate Inquiry including public hearings set to start next month.

“GM’s senior management needs to front up to the Senate Inquiry and answer a range of questions, such as when they first knew that Holden would be withdrawn, why they mislead dealers and consumers about their commitment to Australia, why they refused fair compensation to Dealers and the details of its new General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,” Australian Automotive Dealer Association CEO James Voortman said in a statement.

The Australian Competition and Consumer Commission (ACCC) has the right to continue investigation into the winding up of the Holden business as does corporate watchdog ASIC.

Separately, if a significant number of metropolitan dealers remain outside the agreement, this may impede the establishment of the GM Specialty Vehicles network.

GMSV is essentially GM’s replacement for Holden in Australia and has been targeted by the AHDC as inappropriate for GM to develop while closing down its current local business.

GM axed Holden in February and its franchise agreements with its dealer network two-and-a-half years into a five-year term.

It has stood firm on its compensation offer of $1500 per car sold over a set period, partial reimbursement of capital works and access to a lucrative five-year service and spare parts agreement catering to Australia’s 1.6 million Holden drivers.

GM has been unswayed through mediation, an offer from the AHDC to cut its compensation per car demand from $6100 to $2500 and last-ditch pressure from the federal government to go to arbitration and extend the June 30 deadline.

In its statement the AHDC blasted GM’s attitude.

“Weak regulations, heavily favouring the multinational franchisor, have effectively allowed GM to walk away from their agreements leaving dealers with empty showrooms and millions in losses,” Nicholson said.

“GM have thumbed their nose at Canberra along the way, refusing to negotiate in good faith, making a mockery of mediation and finally rejecting arbitration. If Australia continues to allow small, family businesses to be ruined by overseas corporates then what have we become?”