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HOLDEN management in 2005 instigated a change of attitude that effectively broke the strong relationship with dealers and contributed to disharmony that continues today, the senate inquiry into Holden’s conflict with its dealer group was told.

The Senate, Education and Employment References Committee inquiry this week was also told that despite Holden’s denial, dealers and former executives indicated there was a planned exit from Australia made years before the announcement that Holden would cease production.

Former Holden executive and head of HSV, John Crennan, appearing as a senate inquiry witness to complaints by dealers of unfair treatment by General Motors, said that up until 2005, Holden dealers gave “top marks” in relation to Holden factory and dealer relations.

Asked by Senator for NSW, Deborah O’Neill, what changed after 2005, Mr Crennan said “there was a different way of doing business”.

He referenced the 1980 closure of the Holden Pagewood factory, which opened as a coachbuilding plant for the new General Motors-Holden’s Ltd in 1940 and ended as a Commodore plant, as involving all parties from government through to suppliers.

“It was as comfortable a process that you’d ever want to have where there was collaboration between the parties prior to the announcement,” Mr Crennan said.

“In 2005 there was a different way of doing business and – I won’t name names but certainly every dealer in Australia will know who I’m talking about – decided to change the needle a bit and move the partnership relationship to a ‘them and us’.

“There has been a gradual decline since then in the feeling between the dealers and the factory which has never recovered.”

The president and managing director of Holden in 2005 was Dennis “Denny” Mooney, who was appointed on January 1, 2004 and returned to the US as vice president of GM Engineering on August 1, 2007.

Senator O’Neill made a comment to the inquiry that there were then “vastly different management decisions from GM” and that GM and Holden was “secretive” and created “an ambush”.

Mr Crennan said that in the 1970s, there was a campaign by Holden that centred on the brand being trusted by Australians.

“There was enormous trust in the brand,” he said.

“That carried through for a long time as an underlying feature of the brand, including the supply of parts right through to the professionalism of its dealerships.”

Now he said he was very disappointed with the current relationship between GM and Holden and the dealers and termed it as “hostility”.

“Holden had every opportunity to go out in a blaze of glory,” he told the inquiry.

“It could have been a celebration of the life of Holden and dealers would have gone out on the biggest high and there would be customers coming from everywhere.

“It would be a wonderful demonstration of a company. It was an easy win. Instead we got this hostility.”

Mr Crennan started at GM-H in late 1962 and joined the sales department in April 1963, spending 55 years with the company. He followed his father, Henry, who worked in the purchasing department and had a 42 year career with Holden before retiring in 1968.

There was also criticism of the poor government handling of the franchising code.

The inquiry also heard from Australian Automotive Dealer Association chief executive James Voortman who fingered an ineffectual franchising code of conduct as being at fault in failing to protect dealer interests.

He termed the code as “impotent and grossly inadequate” and said it was urgent that regulations needed to be in place to resolve disputes.

The inquiry heard that the AADA wrote to the minister for industry and science, Karen Andrews, and that it “was obvious the government favoured franchisors over franchisees.”

Senator O’Neill said the Fairness in Franchising Report of the parliamentary joint committee on corporations and financial services, delivered in March 2019, made reference to arbitration and contained 22 recommendations.

She said that “if the government had read the document, many Holden dealers wouldn’t be in the situation they are today.”

The inquiry also heard from Holden managing director Kristian Aquilina who said the conspiracy theories about GM planning the closure of the brand long before any announcement were incorrect.

He told the inquiry that he was told of the closure on February 14 and the official announcement was made on February 17.

Questions from the committee involved another witness, Inverell, NSW, Holden dealership F. Gaukroger and Sons’ dealer principal Mark Palmer.

Mr Palmer said he believed Holden had planned to leave Australia for some period before the announcement.

“I volunteered in 2017 for a new signage program as my Holden dealership was looking a bit tired in comparison to my other franchisees,” he told the inquiry.

“My request went for months and months and I was given the runaround including being told to contact different people who were either not there, or not in the role that could help me.

“In my opinion, I’m pretty sure they were planning their exit well before then. Otherwise, why would they refuse to help someone who was requesting signage at my own expense? Wouldn’t they want to sell more vehicles?

Senator O’Neill said: “Would they run the dealerships down to reduce the cost of the final payout?”

Mr Palmer said: “Absolutely.”

In a late submission to the inquiry, Senator Pratt read that the company structure of Holden was alleged to have changed in 2018.

From the submission, she said it went “from General Motors-Holden’s Ltd to a new company, GM Holden NSC Pty Ltd.”

“In addition, it (the submission) asserts that the Holden service operations agreement has forced dealers into contracts riddled with unfair terms and prevents the opportunity for compensation.

“It says: ‘Holden has effectively assured dealers they have no lifeline to sustain their business once Holden has gone’.”

Senator Pratt said to Inverell Holden dealer Mark Palmer: “Are you aware of that?”

Mr Palmer said: “Yes. It’s exactly why we are in this situation.”

“The agreement is so far in their (Holden) favour there may as well be no agreement,” he said.

“We (dealers) have no input. It’s all weighted to Holden and there’s no opportunity for negotiation. That is why GM has said insistently that the offer is reasonable.”

The inquiry is continuing with a final report due at the end of the year.

By Neil Dowling

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