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Report: Holden dealers threaten legal action against General Motors

Stephen Ottley

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Friday 27th March, 2020 - 9:39am

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Holden dealers are reportedly unhappy with General Motors.

Angry Holden dealers are preparing a possible legal action against General Motors, alleging the American auto giant misled them over the closure of the Australian brand.

According to a report on Car Advice, Holden’s network of dealers have engaged leading law firm HBL Ebsworth to investigate possible action against GM about the way the company was run in the lead up to its demise. Holden dealers are reportedly upset by indications that GM knew for some time that an exit from right-hand drive markets was an option for the brand, but still ask for Holden dealers to invest in expanded and upgraded showrooms at considerable cost.

In a legal letter seen by Car Advice the dealer’s law firm has reportedly asked GM to retain any internal records about the decision to close Holden for any possible future court case. However, it’s important to note that no legal action has officially begun yet, only an exchange of letters. There is still a window for the two parties to sort out their difference and avoid a potentially long and costly trial that could reveal the process and timing GM took to shut Holden.

The dealers are also unhappy at the compensation offer from GM to terminate their contracts early as part of the American firm’s decision to abandon the Australian market. GM reportedly calculated a payout based on multiplication of a dealership’s average saves over a three year period, from 2017 to 2019. However, the dealers believe that calculation is unfair and should be significantly higher.

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