General Motors hits back at Holden dealers
Tuesday 5th May, 2020 - 11:14am
Holden’s departure from Australia won’t be painless.
The brand’s dealers and parent company, General Motors (GM), are at loggerheads about the amount of compensation that the American firm owes its Australian operators. Holden dealers have engaged law firm HWL Ebsworth to discuss the matter with GM in the hope of striking a fairer deal, from the dealers’ perspective.
However, GM believes the dealers’ demand is unreasonable and has accused HWL Ebsworth of making “misleading” and “deceptive” claims around the company’s timing to close the Holden brand.
The issue around the financial settlements is the amount GM wants to pay dealers for the remainder of their contracts, which has been calculated to a per car figure based on sales between 2017 and 2019. According to a statement from GM, HWL Ebsworth is requesting a payment of $6110 per car, while GM believes it only owes $1500 per car; based on an assessment from PricewaterhouseCoopers (PwC) and Norton Rose Fulbright. GM has accused HWL Ebsworth and the dealers of failing to factor in other elements of the business, including servicing, into its calculation. GM went a step further and claimed that PwC came up with a figure of between $350-1409 per car.
“We consider that Holden’s Transition Support Program (TSP) is more than fair and reasonable, even before the devastating impact of COVID-19 on the economy and industry,” the statement read.
GM also used the opportunity to hit back at reports from dealer sources and HBL Ebsworth that the American company had been planning to close Holden since 2015, and allowed dealers to invest millions into new or upgraded showrooms knowing that the brand would be shuttered.
GM cited its investment in new right-hand drive models for Holden including the Equinox and Acadia SUVs, as well as upgrades to the Colorado, Trailblazer and Trax between 2017 and 2018. It also highlighted its investment into the right-hand drive Corvette program and the launch of the Maven mobility business as other indicators of GM’s commitment to the Holden brand.
The statement said: “There were also large investments made in marketing campaigns to improve Holden’s brand image and sales, ongoing spending on motorsport and other sponsorships, and significant investments in engineering staff and major upgrades to facilities at the company’s proving ground at Lang Lang in Victoria.
“Investments such as these cannot by any logic be held to be the actions of a company that allegedly intended to close through that time.”
HBL Ebsworth is yet to publicly respond to General Motors’ statement.