While the issue is yet to be resolved, the role of developing some sort of protection for car dealers from the power imbalance that exists between dealers and their franchisors is now going to Senator Michaelia Cash, minister for employment, skills, small and family business.
GoAutoNews Premium has been told that Minister Cash sees dealers as a better fit for her small and medium business constituency.
Senator Cash has wasted no time in grasping the issue, sending an emissary on a tour of Australia to interview dealers first-hand about the controversy.
The anger with the Coalition boiled over in the lead-up to Christmas when Minister Andrews released an “Automotive Principles” policy for an industry code that was voluntary and was to be trialled for two years before the government revisited the issue.
The AADA issued a note saying that Minister Andrews’ actions were a “kick in the guts” for car dealers and their 60,000 employees and it was a major setback for dealers who were seeking to be protected from OEMs who abused their uneven power over dealers.
AADA CEO James Voortman said in the note: “Just when dealers thought this year could not possibly get worse, Minister Karen Andrews has sided with multinational car manufacturers, some of which have treated Australian dealers and their customers with absolute disdain in 2020.
“What we have today is a do-nothing policy cynically released on a Friday afternoon,” he said.
The outrage at the Coalition was further fueled by the fact that Minister Andrews did not even wait until the Senate Committee enquiring into the relationship between car makers and their dealers had reported to the parliament.
Immediately upon seeing the direction Ms Andrews was taking the issue with the December announcement, the Australian Automotive Dealer Association (AADA) began encouraging members to contact their local Liberal and National Party members to spell out their frustration that the government under Minister Andrews “just does not get” the importance of the issue to dealers’ futures.
They argued that Karen Andrews was the minister responsible for a car industry which no longer existed and that Minister Cash should be responsible for the issue because she was responsible for small to medium enterprises.
The concerted grass-roots campaign by dealers is said to have sent shockwaves through the party rooms of the Coalition who feared that not only would they unilaterally lose the funding support of car retailers who traditionally got behind them in their electorates, but that funding support was going to get behind the ALP candidates because a federal Labor government seemed to be the dealers’ best avenue to get the issue legislated in their favour.
The meetings with MPs and senators started after the public release of the proposed trial in December and continued throughout January.
The message was that the ALP understood the issues of power imbalance the dealers faced and had already stated a Labor government would pass a mandatory code of conduct for car retailers and OEMs.
The dealers’ view of the level of support they would get from Labor had been confirmed by the performance of Labor Senator Deborah O’Neill in the Senate Committee hearings looking into the relationship between dealers and OEMs where she has demonstrated a strong understanding of the issues involved and has closely followed and expressed her concern at the revelations by dealers about OEM behaviour.
Dealers pointed out to their local LNP members that if Labor was going to support a mandatory dealer code then it was in the dealers’ interests to support ALP candidates with electoral funding in the electorates where their dealerships were located.
They also pointed out that collectively dealers employ 60,000 people (voters who want to keep their jobs) with each dealership buying in services from a wide number of other businesses in their communities.
GoAutoNews Premium has been told that by the end of January “there was panic in the party room with questions being asked as to why the party could be getting the politics of the issue so wrong”.Some large dealers were talking about sums as large as five figures for the ALP and dealers contacted by GoAutoNews Premium said they were looking at figures of around $25,000 that Labor would get and the LNP would not get.
By John Mellor