The letter, which has been shown to GoAutoNews Premium, alleges that the dealers are being unfairly treated by GM Holden and that both the federal government and the Australian Competition and Consumer Commission (ACCC) have been made aware of the “unfair tactics being deployed by Holden” and have requested relevant files from the dealer council to support an investigation by the regulator into GM Holden’s actions.
Dealers have been asked to forward to the council any relevant documentation to forward on to the government and the ACCC.
It also appears that the dispute is very likely to spill over into the courts.
The letter says that the dealer council “will be tendering various litigation funding firms who are very keen to take this case on and we will likely file a class action if an acceptable settlement cannot be reached”.
The letter reveals that GM’s offer to Australian dealers of $1500 per car sold over the 2019 year is a long way short of the $6000 that has been arrived at on behalf of the council by KPMG forensic accountants analysing the full impact of the loss of the Holden business to dealers.
The letter said that the dealer council has been advised it was likely to win in any action against GM and GM Holden for seven-and-a-half years’ worth of the $6000 KPMG number, plus any significant CAPEX claims.
The letter also reveals that Honda, which has just announced the closure of many of its dealerships over the next 15 months in Australia has “offered a different, and much higher, calculation (compared) to Holden”.
The letter goes on to say that: “You should also be aware that Holden’s offer to New Zealand dealers is almost double what Australian dealers have been offered.”
The legal advice also alludes to the fact that the dealers could succeed in showing that they were misled by the statements made by Holden management about Holden’s future bright prospects in Australia in the lead-up to the withdrawal decision and that they suffered from Holden specifically blocking dealer requests to take on the sales of other brands in the years before the withdrawal announcement as dealers moved to spread their business risk over a wider number of franchises and maximise returns from their investments in retail facilities.
GoAutoNews Premium has been told that GM Holden says that if dealers do not accept its offer by March 31, then all offers will be withdrawn, leaving them with nothing.
The letter says: “As you would expect, Holden is using various legal tactics, plus the coronavirus, to not meet and/or engage with us.
“This means that while they are still meeting with you they are:
a) not allowing you your right to representation;
b) using undue influence to force you to make a decision; and
c) employing bullying tactics as has been witnessed in the offer proposal.
“The ACCC and government are aware of the tactics being deployed by Holden and they have now requested our files in relation to this. If you have any further examples of Holden’s unfair tactics, please send them to us.”
In response, Holden said: “Holden strongly disagrees with any assertion that it has acted improperly. Holden believes the compensation offer to its dealers is fair.”
By John Mellor
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