The Prime Minister Scott Morrison is meeting with members of the Holden dealer council in Canberra this morning, as all 200 showrooms nationally are expected to unanimously reject General Motors’ initial compensation offer.
CarAdvice understands all dealerships who have been offered compensation packages so far – from the biggest to the smallest outlets – have “roundly rejected” the first estimates and are seeking the support of the Federal Government to ensure they are not short-changed by General Motors' head office in Detroit.
Holden dealers are half way through their current five-year franchise agreements, but General Motors has terminated the contracts well ahead of the 31 December 2022 renewal date because it is exiting right-hand-drive markets globally by the end of this year as they have been deemed unprofitable.
CarAdvice has been told the Holden dealer council met with Deputy Prime Minister, Michael McCormack, and the Federal Minister for Small Business, Michaelia Cash, yesterday.
A veteran Holden dealer told CarAdvice on condition of anonymity: “The initial offer from General Motors in Detroit was quite frankly a real kick in the guts, an insult, and well short of where they need to be. Dealers of every size right across the country have rejected this offer and we will be challenging it.”
General Motors is rolling out its remaining compensation offers in the coming week and says only 13 per cent of dealers have been made formal offers to date. However, the Holden dealer group claims the rejection will be unanimous because they now know how the US car giant is forming its calculations.
“Our estimations are that the compensation offer covers just 16 per cent of the dealer’s liability”, said the Holden dealer council representative. “No one is going to accept that.”
General Motors is rolling out its remaining compensation offers in the coming week, but the Holden dealer council claims the rejection is unanimous because they now know how the US car giant is forming its calculations.
“The compensation offer covers just 16 per cent of the dealer’s liability”, said the Holden dealer council representative. “No one is going to accept that.”
The meeting between leading Holden dealers and the Prime Minister’s office was scheduled for 9:30am this morning and expected to go for up to an hour.
The revelation comes as a large number of Holden dealers are close to selling out of their remaining stocks of vehicles following huge discounts funded by the factory.
The Australian Automotive Dealer Association (AADA), which represents 1500 dealer groups across all brands, covering 3500 new-car showrooms and more than 60,000 employees nationally, has renewed calls for an overhaul of current franchise laws so dealers are not left high and dry when an automaker terminates their contract early.
The car industry lobby group, the Federal Chamber of Automotive Industries (FCAI), which represents multinational car companies, says it is happy with the changes to franchise laws that have been proposed.
In the wake of last week’s announcement, Prime Minister Scott Morrison strongly criticised General Motors’ departure from Australia, having taken $2 billion of taxpayer funded support over decades.
Last week, Holden had 204 dealers listed on its public website but this week there are 203 – owned by 185 dealer groups. The number of showrooms in Queensland has dropped from 40 to 39 in the past month.
Holden showrooms in Australia by state and territory:
NSW and ACT: 65
Northern Territory: 2
South Australia: 20
Western Australia: 24
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