General Motors’ decision to kill Holden but remain in Australia with the new-look GM Specialty Vehicles has created a backlash amongst angry dealers.
The Australian Automotive Dealer Association (AADA), the peak body that represents what’s left of the Holden dealer network, has slammed the decision to start GMSV in the wake of the ugly dispute between GM and the Holden dealers over compensation at the brand’s closure.
“The launch of GMSV poses many questions and it seems unthinkable that shortly after ruthlessly dismantling the Holden Dealer network GM can simply be allowed to launch a new brand,” said AADA CEO James Voortman in a statement.
“GM remains in dispute with a number of Dealers and most who have settled did so under duress, accepting the inadequate compensation on offer. Even a last minute request from the Federal Government to settle the dispute through arbitration was rebuffed by GM.
“GM has burned so much goodwill after taking so much from Australian taxpayers, yet here they are about to start another business,” he added.
As previously reported Senator Deborah O’Neill wrote to Australian Securities and Investments Commission (ASIC) chairman, James Shipton, in June asking for an investigation into the American company’s plans for its GMSV. Senator O’Neill was reportedly concerned about “a potential phoenixing situation” – a business practice that typically involves taking the key assets from one company and transferring them to a new entity that does largely the same business; it can be illegal in certain circumstances.
GMSV is being established under the leadership of Kristian Aquilina, interim chairman and managing director of GM Holden and will be headed by long-time Holden executive Joanne Stogiannis. It will run alongside GM’s other local business interests, Holden Aftersales and Isuzu New Zealand.
“We know Senator Deborah O’ Neill has written to ASIC asking them to investigate a potential phoenixing situation regarding GMSV,” Voortman said. “We also know that last year, only months before announcing it was dumping the Holden brand, General Motors changed its corporate structure.
“It is important to get to the bottom of these issues as GM will have significant liabilities in Australia for many years to come.”
GM hasn’t officially revealed the nature of its dealer network, set to open in the fourth quarter of the year, but it’s believed it will consist largely of HSV and selected former Holden dealerships. It’s expected to be significantly smaller than the 185 dealers Holden had nationally before it was axed.
GM has hit back at the claims, dismissing the notion that GMSV is a case of phoenixing because it will be a different business model to Holden.
“Any suggestion of phoenixing is simply absurd,” a GMSV spokesperson told Torquecafe.com. “GMSV is a very different business which will compete in niche luxury and performance segments not the mass market.”
GMSV will import the right-hand drive Chevrolet Corvette from the USA, but the Chevrolet Silverado 1500 and 2500 will both be converted to right-hand drive by GMSV partner, Walkinshaw Automotive Group, which employs approximately 150 people at its Melbourne factory.
“GM Holden flatly rejects the spurious allegations of phoenixing,” the GMSV spokesperson said. “It’s a shame some parties seem to be out to talk down a new business venture employing hundreds of Australians before it even begins. This new venture directly adds sales, marketing and aftersales roles to GM’s 200-strong presence in Australia, and indirectly supports over 150 skilled engineering and manufacturing jobs at our partner in Victoria.”
The spokesperson added that GM Holden is “100 per cent committed” to supporting all Holden customers with aftersales service and parts for at least the next 10 years. They also confirmed that many of the dealerships have begun the transition to being authorised Holden Services Outlets.