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Holden dealers join forces in compo fight

Businesses across the ditch team up as they press for extra compensation from General Motors.
Posted on 13 March, 2020
Holden dealers join forces in compo fight

Holden dealers in Australia have united as they seek improved compensation packages after General Motors (GM) decided to retire the brand.

Law firm HWL Ebsworth and forensic accountants KPMG have been appointed by the group of 185 dealerships to negotiate a better deal, with GM’s initial offers described as “grossly inadequate”.

GM announced its withdrawal from right-hand-drive markets globally in February and says it has set aside US$1.1 billion (NZ$1.8b) to close its operations in New Zealand, Australia and Thailand.

However, the compensation bill to Holden dealers in Australia alone is estimated to cost more than US$2b, reports CarAdvice. 

The Holden Dealer Council believes GM’s offer is one-fifth what dealers are owed, with a key argument to its claims being that the US car giant encouraged outlets to invest in new showrooms even though it was planning to pull out of the Australian market.

Holden says it is doing the “right thing by its dealers during this difficult time”. 

“We believe the offer is fair,” a statement from the brand says. “In most cases Holden dealers will receive compensation a factor of four times the average Holden new car profit per unit of all dealerships over the 2017-2019 fiscal years.”

Meanwhile, Australia’s Holden dealers, who represent 203 showrooms, are being urged to make submissions to a senate inquiry announced by the Australian federal government. The inquiry, which has the backing of both sides of politics, was announced after a delegation of dealers met with Prime Minister Scott Morrison in Canberra on February 26.