US car giant General Motors has agreed to “negotiate in good faith” over the compensation offers to dealers for the shutdown of the Holden brand, after intervention by the Australian Competition and Consumer Commission.
In a media statement issued today, the ACCC said it was “preparing for court action had Holden not changed its position”.
“We were prepared to litigate today and institute proceedings in the federal court … however Holden has agreed to follow the proper dispute resolution process,” ACCC chairman Mr Sims said in an interview with CarAdvice.
The deadline for agreements to be reached between General Motors and the 185 Holden dealers – who operate 203 showrooms nationally – has been pushed back again, this time from the end of May to the end of June.
“We believe this deadline was unnecessary and also unfair,” Mr Sims said in a media statement.
“As franchisees, the dealers have less bargaining power than Holden. Holden was putting pressure on dealers to accept the compensation package by 31 May without giving a proper opportunity to negotiate and engage in a dispute resolution process.”
Holden dealers have been in dispute with General Motors since the shutdown of the brand was announced on 17 February 2020, almost three years before their five-year franchise agreements were due to expire.
General Motors had offered Holden dealers a compensation package equivalent to $1500 per new-car sold over a set period, in addition to other costs such as showroom upgrades.
Analysis by an independent accounting firm appointed by Holden dealers estimated they were owed the equivalent of $6100 per new-car sold over the set period, in addition to showroom upgrades and other costs.
General Motors and Holden have consistently claimed their initial offer was fair. A fortnight ago, General Motors and Holden said dealers could be owed a fraction of the initial $1500 per new-car sold over the set period, based on more recent calculations.
In addition to monitoring the negotiations between General Motors and Holden dealers, Mr Sims told CarAdvice the watchdog is still continuing its investigations into “potential misleading and deceptive conduct”.
General Motors and Holden have previously claimed accusations of unconscionable and misleading conduct are “baseless”, “plainly wrong”, and “unsupported by fact or law”.
The ACCC media statement issued today said the consumer watchdog will “continue its broader investigation into Holden’s engagement with dealers in relation to its withdrawal from Australia”.
A statement issued this evening by General Motors Holden said: “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.”
The statement continued: “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.”
General Motors repeated its earlier statements that it “continues to seek an outcome that supports the transition for dealers and ongoing support for existing customers”.
General Motors also said it “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”.
A bulletin sent to Holden dealers after the ACCC issued its statement today, said: “We are pleased that GM Holden has agreed to participate in good faith to the mediation process instigated by Holden dealers.
"We view this as a step in the right direction as Holden dealers continue to seek fair and reasonable compensation that reflects our long term relationship and financial commitment to Holden. We look forward to reaching a mutually acceptable resolution with GM Holden.”
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