GM HOLDEN has today announced two important steps in the transition of its dealer network, as the company implements its plan to wind-down sales, engineering and design operations.
The company will extend until 30 June 2020 the date by which dealers can accept the current offer from Holden.
Separately, GM Holden will participate in a dispute resolution process to assist in resolving discussions the company has been having with dealers since February.
The company has proposed conducting the dispute resolution in the first half of June, and it will include discussing further the detailed and extensive information that we have provided to dealers and their representatives, including analysis carried out by PricewaterhouseCoopers, which fully explains the fairness of the company’s offer and dispels misinformation about it.
Today’s announcement follows GM Holden’s constructive engagement with the Australian Competition and Consumer Commission.
GM Holden’s current offer to dealers remains open for acceptance until 30 June, as has already occurred. It is noted that good faith participation in dispute resolution does not oblige a participant to accept, make, change or increase any offer of compensation.
Extending the date of acceptance will also provide further time for the few dealers which have not yet provided documentation to review their claims around facility investments.
GM Holden firmly believes it has operated in good faith and that its offer is fair and reasonable. The company continues to seek an outcome that supports the transition for dealers and ongoing support for existing customers.
As the company has stated previously, GM Holden wants an ongoing relationship with dealers and it does wish to provide them with the opportunity, as part of a compensation package, to enter into an ongoing long-term service and parts supply agreement.
The Minister for Industry, Science and Technology, Karen Andrews, said: “The Morrison Government welcomes GM Holden’s guarantee to negotiate with car dealers in good faith, after its decision to withdraw from the Australian market.
“Today’s commitment from GM Holden to the Australian Competition and Consumer Commission (ACCC) is positive progress toward a fair compensation package for dealers and their employees.
“From the beginning I have said GM Holden must do the right thing by the Aussie dealers who’ve carried their brand – many of them for decades.
“I wrote to GM Holden last week to express my concern that negotiations were becoming increasingly difficult, and reiterate the Government’s expectation that they work to achieve a fair outcome.
“It is clear that GM Holden has gained significant benefit from Australian consumers, dealers and Government over the years.
“GM Holden needs to keep that in mind as negotiations progress – and should know the Australian Government and the ACCC are watching closely.
“I am very disappointed that the ACCC has found that GM Holden was placing undue pressure on dealers to accept their compensation package by 31 May.”
“The ACCC found this deadline was ‘unnecessary and unfair’ and has advised it was preparing for court action had GM Holden not changed its position.
“GM Holden also committed to meeting its obligations more generally under the Franchising Code and the Dealer Agreement Dispute Resolution provisions.
“Despite today’s agreement, the ACCC will continue its broader investigation into GM Holden’s engagement with dealers in relation to its withdrawal from Australia.”
Australian Automotive Dealers Association
AADA CEO James Voortman said: “There is a sense of relief among Holden dealers and they are incredibly grateful that the ACCC pressured GM to extend the deadline for its compensation offer and to engage in good faith negotiations with dealers.
“Dealers are already struggling with the worst trading conditions on record and were then given an end of May deadline by GM to accept an offer described by all of the Holden dealers I have spoken to as unacceptable.
“General Motors’ treatment of the 185 Holden dealers has been disappointing to say the least, but this represents an opportunity for them to sit down with the dealer network and develop a fair and reasonable plan to compensate these dealers.
“Many of these dealers have represented Holden for decades, some for over 70 years. They have made significant investment in facilities, equipment, stock and training. They deserve reasonable compensation.
“The ACCC is well aware of power imbalance between dealers and offshore manufacturers which it revealed in its 2017 New Car Retail Market study.
“It’s not just the car companies pulling out of Australia who are a threat to local dealers but the unfair terms that many of them face in their commercial arrangements are an ongoing problem, not just for the local dealers but also for Australian consumers and small business who rely on them.
“That is why AADA has been working with the Government on draft automotive franchising laws due to be finalised in the coming weeks. It is crucial that these laws are strengthened so that Dealers are given protections similar to those afforded to Dealers in countries like the US and the EU.
By John Mellor