Queensland Senator James McGrath offered to buy the Holden brand from US car giant General Motors for $1 in an extraordinary speech in federal parliament last night.
Senator McGrath also accused General Motors of using the global coronavirus crisis to prolong compensation negotiations with Holden dealers, after announcing in February it would axe the iconic Australian car brand by the end of this year.
The deputy government whip in the Senate repeated his controversial comments from earlier in the year, alleging “General Motors acted with the ethics of a … purse snatcher”, by making the sudden announcement to close 203 Holden showrooms operated by 185 dealers nationally.
Senator McGrath added: “And nothing I have heard from Holden dealers throughout Australia since then has changed my view or that of my colleagues in this parliament”.
Senator McGrath then took aim at the global boss of General Motors, Mary Barra (pictured below).
“Mary Barra … who has a pay package in the tens of millions of dollars, is sending Australian families to the wall,” he said.
According to a report by the Bloomberg news agency, Ms Barra received $US21.6 million in 2019, about $US240,000 less than she earned in 2018 – but still “roughly 203 times the average GM employee’s (salary package) of $US106,715”.
Senator McGrath then told federal parliament: “Ms Barra is now using coronavirus as an alibi for the worst corporate behaviour. It now appears General Motors (is) privately attempting to put the screws to these Holden franchisees, forcing timelines and attempting to make dealers sign up to further oppressive agreements as part of settlements, and to stretch out payments”.
The Senator then blasted: “Shame on you General Motors, shame on you Ms Barra and your American legal chicanery”.
“To put it bluntly, General Motors (is) trying to sneak under the cover of COVID-19 to disappear into the night and leave Australian businesses stranded after an 89-year one-night stand,” said Senator McGrath, referring to GM's presence in Australia since 1931, before it operated under the Holden name from 1948 (pictured below).
When contacted for comment after last night’s explosive speech, a representative for General Motors Holden repeated the company’s earlier statement: “GM Holden firmly believes the compensation offer to its dealers is fair, and strongly disagrees with any assertion that it has acted improperly. We remain open to meet for a constructive purpose with dealers.”
Last week, General Motors broke its silence over the negotiations, hit back at claims its initial compensation offer to Holden dealers is unfair, and said accusations of unconscionable and misleading conduct are “baseless”, “plainly wrong”, and “unsupported by fact or law”.
General Motors said the claims by dealers are based on “a bizarre and illogical argument that GM has secretly planned to shut down Holden since at least 2015, but made various significant investments in programs, plans and strategies to support and promote Holden in order to mislead dealers into thinking that there was no secret plan to shut down Holden”.
Last night, Senator McGrath said any delaying tactics used during the negotiations would be “an unforgivable stance for General Motors to be taking, particularly at a time when the Australian economy and businesses (are) managing the economic shock of the current (COVID-19) pandemic”.
“I’m very concerned at the apparent stonewalling by General Motors in regards to what should be good faith commercial negotiations with its dealers, in relation to their exit from the Australian market,” said Senator McGrath. “General Motors (has) promised the earth and given a bucket of sand.”
Then, in a surprising turn in the speech, Senator McGrath said: “General Motors may think the rich history of the Holden brand is worthless, but I think it’s priceless. If General Motors (thinks) the brand is worth nothing then hand the brand back to Australia. Give it back to the Holden dealers. Indeed, I’m happy to purchase the Holden brand off General Motors for a dollar. I will send you Ms Barra a dollar in the post and you can give us the Holden brand back and we will give it to the Holden dealers.”
Senator McGrath added: “The decision by General Motors to discontinue Holden operations in Australia is their prerogative. But they must do so responsibly and in a manner that is fair to the very people that has enabled the company to operate in the Australian marketplace.”
He continued: “General Motors (needs) to understand that what they’re offering dealers in compensation for killing the brand is just not good enough.”
Senator McGrath said a fair compensation offer from General Motors to Holden dealers – after announcing the end of their franchise agreements almost three years early – was “about the livelihood of people right across the country, particularly in regional areas. It’s not just about dealers and franchisees that are impacted by the decision, it’s about the mechanics, the allied trades, the owners of thousands of vehicles.”
There are still approximately 2 million Holden cars on Australian roads and General Motors has pledged to retain a staff of 200 people to support service, parts, warranty claims and recalls for “at least” the next 10 years.
Senator McGrath concluded his speech by saying: “General Motors, be better. Australia and Holden dealers want a fair deal. They don’t want a special deal, they just want a fair deal.”
Holden dealers were initially offered by General Motors the equivalent of $1500 per new car sold over a set period – in addition to any extra costs for showroom upgrades. However, Holden dealers later received independent analysis that estimated they were owed the equivalent of approximately $6100 per new car sold over the set period.
General Motors insists its initial compensation offer to dealers was fair. However, last week General Motors said a subsequent analysis by an accounting firm – which it had appointed – found Holden dealers could be owed as little as a quarter of the original sum offered.
Since then, negotiations between Holden dealers and General Motors appear to have stalled. The deadline issued by General Motors for dealers to sign has been moved to the end of May, having been shuffled back a number of times already.
Meanwhile, the Australian Automotive Dealers Association (AADA) issued a statement saying the recent shutdown of the Holden brand and the dramatic changes to the Honda dealer network “highlights the risks that many local car dealers face, and the imbalance that exists between them and the large foreign multinational car companies”.
James Voortman, the chief executive of the AADA, which represents 60,000 employees at 3500 showrooms nationally, said: “After announcing it was terminating 185 dealers across Australia, the compensation offered (by General Motors) to those dealers has been described as totally inadequate and not one dealer has accepted the offer.”
CarAdvice understands the negotiations between Holden dealers and General Motors are at a stalemate.
“Dealers are currently doing it extremely tough with some of the worst sales figures in living memory,” said Mr Voortman.
“The ability to recover from this economic downturn will be greatly assisted by laws which protect dealers against the abuses of multinational vehicle manufacturers,” he said.
The AADA says car dealerships across Australia “provide local jobs and work for local small businesses, and we need to encourage and support local dealers to invest and grow their business, especially as we look to recover from the terrible impacts of drought, bushfires and COVID-19”.
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