“A Holden dealer has written to Industry Minister Karen Andrews about the GMSV plans and expressing disappointment at the inaction of the minister’s office, which has sat on draft legislation that would help resolve the dispute with GM and address the substantial power imbalance between franchisee and franchisor,” a spokesperson for the Australian Holden Dealer Council said.
Ms Andrews said she continued to engage with dealers, meeting and speaking with them directly about their ongoing negotiations and also had been in contact with dealer representatives.
“Minister Cash and I also met this week with GM Holden to reiterate the expectation of the government, and Australians, that they negotiate in good faith and ensure a fair outcome for the Aussie dealers who’ve carried their brand for decades,” she said.
ALP senator Deborah O’Neill said the failed mediation showed the substantial imbalance of power that existed between franchisors and franchisees.
“It has been over 15 months since the Parliamentary Report into Franchising highlighted this exact issue that Holden dealers now face, but this government refuses to stand up for small business and is beholden to large franchisors such as General Motors who are abandoning their car dealers here in Australia,” she said.
Holden’s offer to the dealers, of $1500 per vehicle for the next 2½ years alongside partial reimbursement for capital expenditure such as showroom refurbishments and a continuing service arrangement for dealers beyond the current franchise agreements, is open until the end of June.
However, the compensation offered by Holden, which equates to approximately $146 million, is well short of dealers’ demands for $6100-a-car, which they say takes into account the full extent of the losses they face and would result in a compensation figure of $594 million.
One of the affected franchisees is Ken Jacka, who has been forced to sell his Holden dealership in Maryborough which was started by his father in 1979.
“General Motors has been saying you can stay on offering parts and service but that’s difficult when you have no new cars, that is the crux of what we do,” he said. “As much as I want to make it work, it doesn’t work.”
Mr Jacka said he had sold what remained of the business and the property to the local Toyota dealership in a “bittersweet” deal which retained jobs for about half his staff.
“We sold it at less than building value only, we have basically given the business to them,” he said. “It’s sad. I’m glad my old man is not here to see what has happened to the brand. I have never driven anything but a Holden car and I don’t know what I will drive now.”
A spokesperson for Holden said the company had considered all matters raised during its discussions with dealers and remained of the view that its offer to dealers was fair and reasonable.
“We will continue to work with dealers who wish to transition their businesses and access our transition support package,” a spokesperson for Holden said.
“Our broader focus is with our 1.6 million Holden customers.”
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Cara is the small business editor for The Age and The Sydney Morning Herald based in Melbourne