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Holden dealers question GMSV's legality

By David Bonnici, 20 Aug 2020 Car News

GMSV logo

Holden dealers want answers into why GM can form a new company so soon after killing off the Holden brand

General Motors has reacted to claims that the company is involved in illegal corporate practices with the establishment of the GMSV brand, calling them "absurd".

The peak body representing new car dealers in Australia says questions need to be asked about General Motors’ eligibility to launch a new vehicle brand in Australia.

GM this week confirmed it will continue in Australia as GMSV (General Motors Specialty Vehicles), the new incarnation of the Holden Special Vehicles [HSV] brand that will continue to be run in partnership with Walkinshaw.

HSV factory
GMSV will continue right-hand-drive conversions of GM vehicles in Melbourne

However, Australian Automotive Dealer Association CEO James Voortman said GM should be investigated for potential phoenixing, which involves the potentially illegal 'rebirthing' of a business, with one company being stripped of its assets and having them transferred into a new entity that is essentially the same business.  

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“GM has burned so much goodwill after taking so much from Australian taxpayers, yet here they are about to start another business,” Voortman said.

“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,” he said.

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“We know Senator Deborah O’ Neill has written to ASIC [Australian Securities and Investments Commission] asking them to investigate a potential phoenixing situation regarding GMSV.

"We also know that last year, only months before announcing it was dumping the Holden brand, General Motors changed its corporate structure.”

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Senator O'Neill wrote to ASIC chairman James Shipton in June asking for an inquiry into “a potential phoenixing situation” which involved "the introduction into the Australian market of GM Special Vehicles while GM Holden has current large liabilities, particularly to its existing dealership network."

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The Labor Senator also wrote: "I also note that this could involve current directors of GM Holden moving to Registered GM Special Vehicles, a new company that will import and sell GM vehicles in a manner almost identical to GM Holden."

But a GMSV spokesperson has told WhichCar that "any suggestion of phoenixing is simply absurd."

"GMSV is a very different business which will compete in niche luxury and performance segments, not the mass market," the spokesperson said.

“GM Holden flatly rejects the spurious allegations of phoenixing. 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.”

Voortman maintained it was important such questions were investigated

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“After a decade of treating consumers, businesses and the Government with contempt, how can we have faith that GM will change its ways,” he said.

“It is important to get to the bottom of these issues as GM will have significant liabilities in Australia for many years to come.”

GMSV, which will commence operations later this year, will be run by Joanne Stogiannis, a 20-year veteran of the Holden brand. "I am thrilled to be leading a new automotive venture by GM in Australia,” said Ms Stogiannis in a statement.

“Sales of large US pick-ups have been growing consistently and I believe the ongoing strength of that segment will provide a very solid basis for us to build a successful long-term business.

“The plan to bring the stunning new mid-engine Corvette in RHD direct from the factory is an enormously exciting opportunity for local performance car enthusiasts.”