General Motors and Holden dealers start mediation today

Representatives for Holden’s 185 dealers – who operate 203 showrooms nationally – are disputing the initial offer of compensation by General Motors, claiming it is not a true reflection of the impact on their businesses.

Holden dealers claim General Motors announced the end of their five-year franchise agreements with almost three years remaining, had encouraged them to invest in showroom upgrades, assured them the brand was “here to stay”, and promised a range of new models was on the way.

General Motors has consistently said its offer of compensation is fair and reasonable, and based on a period when Holden dealerships were more profitable.

At the centre of the issue: General Motors based its calculations on an average profit of $1500 per new-car sold over a set period, while Holden dealers claim they have received independent advice that they are owed the equivalent of $6100 per new-car sold over a set period.

Holden dealers claim General Motors has not taken into account the entire impact on their businesses.

In part of its response, General Motors said Holden dealers may in fact be owed a fraction of the initial offer, equivalent to as little as $350 per car, but then said it was happy to honour the original deal.

The federal consumer and business watchdog, the Australian Competition and Consumer Commission (ACCC), subsequently stepped in and forced both parties into mediation, rather than carrying out a bartering process in public.

Representatives for US car giant General Motors and Holden dealers are understood to have signed non-disclosure agreements ahead of the mediation process, which is due to be run out of Melbourne this week.