After a protracted battle, two-thirds of Holden dealers have agreed to their compensation package from General Motors, after the US car giant didn’t increase its offer by $1.
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The majority of Holden dealers have finally signed compensation packages – worth a combined value of close to $150 million – with US car giant General Motors.

It follows a protracted legal battle that spilled onto the political field and caught the attention of Australia’s peak consumer and business watchdog.

In the end, General Motors did not increase its initial offer by $1.

Dealers who are yet to sign say they have not given up the fight with Detroit.

At least 120 of the 185 dealers – approximately two-thirds of the network – who operate 203 showrooms nationally agreed to the terms in the final hours of the deadline of 5pm 30 June, 2020, a statement from the Australian Holden Dealer Council has confirmed.

The deadline had been extended numerous times over several months after both parties couldn't agree on the initial offer which, in round numbers, was the equivalent of $1500 per new car sold over a set period of time, in addition to a contribution to showroom and facility upgrades.

Holden dealers in Australia received independent financial advice that calculated they were owed more than four times that amount, or the equivalent of $6100 per new car sold over a set period.

Holden dealers in New Zealand were offered the equivalent of $2500 per car sold over a set period. Holden said dealers in New Zealand were offered more money because they were more profitable than their counterparts in Australia which, the company estimated, lost on average $600 per car last year.

In the end, General Motors did not increase its initial offer of $1500 per car, which was made 10 days after Detroit announced on 17 February 2020 the Holden brand would be retired by the end of this year.

Throughout the months of negotiation, the US car giant repeatedly stated its initial compensation package was “fair and reasonable”.

The deal amounted to a payment of between $100,000 for smaller dealers and in excess of $3 million for larger showrooms, in addition to extra payments for outlets that had recently upgraded their facilities.

After intervention by the Australia Competition and Consumer Commission (ACCC), representatives for General Motors and Holden dealers were forced into two days of mediation, overseen by former High Court judge Mr Peter Jacobson QC. However, those discussions resulted in another stalemate.

The day before the deadline, General Motors issued a statement to dealers that said “there was some publicity over the weekend regarding a suggestion that GM Holden and the Australian Holden Dealer Council would seek to settle their current dispute via arbitration, and that the deadline for the acceptance of (compensation) would be extended beyond 30 June.”

However, General Motors said: “This is not the case. Arbitration was suggested by the Federal Government but GM Holden does not agree that an arbitration process would be appropriate or helpful. We have responded to the government accordingly. Dealers must now make a decision on whether you accept your (compensation package).”

CarAdvice understands one dealer out of 185 had agreed to the compensation offer more than a week ahead of the deadline.

A statement from Australian Holden Dealer Council representative David Nicholson said “more than 120” dealers agreed to the compensation offer after “great reservation and reluctance”, and claimed the reminder who did not sign “will continue to take the fight to Detroit”.

Mr Nicholson said General Motors had “thumbed their nose at Canberra” by “refusing to negotiate in good faith, making a mockery of mediation and finally rejecting arbitration”.

The Holden dealer representative said “weak regulations, heavily favouring the multinational franchisor, have effectively allowed (General Motors) to walk away from their agreements leaving dealers with empty showrooms and millions (of dollars) in losses.”

“General Motors Holden’s exit sets a dangerous precedent,” said Mr Nicholson. “It’s time to make some changes, otherwise it might be your job or business next.”

The Australian Automotive Dealers Association (AADA) said General Motors "flat out refused" a Federal Government request to extend the deadline and to participate in arbitration.

“Over the past four months, 184 Holden Dealers have remained united in their opposition to the grossly inadequate offer of compensation from (General Motors)," said James Voortman, the CEO of the AADA which represents 3500 showrooms nationally across all brands.

“At every turn, (General Motors) has thumbed its nose at local dealers, the Australian Government, and by extension the Australian public, the same public which provided the company with more than $2 billion in taxpayer funded assistance,” said Mr Voortman.

“This has set a dangerous precedent and Australia urgently needs to strengthen its automotive franchising regulations to protect local businesses against the heavy-handed behaviour of some car manufacturers. If we do not act this will happen again.”

Mr Voortman said General Motors "had revenue of $USD200 billion in 2019, and the prospect of fighting them in court was just not an option for many of the dumped Holden dealers.”

The AADA said General Motors management “needs to front up to the Senate Inquiry and answer a range of questions, such as when they first knew that Holden would be withdrawn, why they mislead dealers and consumers about their commitment to Australia.”