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Holden talks to ramp up at level three

Discussions with dealers over compensation remain ongoing, while in Australia franchises have been given until the end of May to accept an offer from GM.
Posted on 23 April, 2020
Holden talks to ramp up at level three

Holden will step up negotiations with dealers over compensation packages for the brand being pulled from the market, once the country moves out of the coronavirus lockdown.

Ed Finn, general manager of corporate affairs for Holden NZ, told Autofile Online the talks had been disrupted by the alert level four restrictions.

General Motors announced in February it was pulling Holden from New Zealand, Australia and Thailand by the end of the year.

“We’re still working through finalising all our agreements with our 31 dealers,” Finn says. “With the Covid-19 lockdown everything has stalled a little bit, so it’s an ongoing process.

“On the whole talks have been reasonably positive and we’re confident of reaching agreement with all our dealers.”

Finn adds no hard time frame has been set for completing the compensation process, after reports from Australia of dealers being given a May deadline to accept a compensation offer from GM.

Lawyers and executives representing the US car giant and Holden’s 185 franchise operators across the ditch met recently to discuss the matter.

It is believed the settlements offered to Australian dealers will come in three separate payments rather than a lump sum. They will receive 30 per cent of their compensation deal within two weeks of signing an agreement, a further 30 per cent within three months and the balance will be paid from October onwards, CarAdvice reports.

GM Holden in a letter to Australian businesses says it needs “to understand from each dealer by the end of May whether they accept our offer”.

At the centre of the dispute is GM’s initial compensation offer, which amounted to an average profit of $1,500 per new car sold over a set period. The Holden dealer group claims the figure should be more than $6,000 per new car sold.

Dealers in Australia are also upset after claiming they were encouraged to invest in showrooms and facilities after being assured by GM the Holden brand had a long-term future.

The letter from GM Holden says it “remains of the view that the transition support program offered to dealers since late February is fair and reasonable”.

The Australian Competition and Consumer Commission (ACCC), the peak watchdog for consumers and businesses, is monitoring the negotiations.

A number of GM Holden executives are reportedly “so appalled” at how dealers have been treated they are prepared to talk openly to an ACCC inquiry as long as they receive protection from prosecution, GoAutoNews Premium reports.