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Holden dealers meet PM over poor General Motors compo offer

By Tim Robson, 26 Feb 2020 Car News

Holden closure 2020

Disgruntled Holden dealers secure meeting with Scott Morrison over compensation offers from GM, but Holden fires back

Angry Holden dealers have met today with Prime Minister Scott Morrison after an initial round of compensation offers from General Motors were slammed as being inadequate.

However, Holden has denied the claims, suggesting it is "disappointed' that dealers are choosing to air their issues in public.

A meeting took place in Canberra between the prime minister and members of Holden’s dealer council and the Australian Automotive Dealer Council to discuss the offers, which are, according to reports, set to be rejected as being inadequate.

Some 26 dealers from 203 have received offers of compensation, according to Holden, which claims that the notion of offer rejections is incorrect.

"Any claim of unanimous rejection is untrue," Holden said in a statement sent to WhichCar. "Further, many dealers we have met with so far have expressed thanks for the professional approach Holden has taken in the discussions."

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There are claims that the compensation offers already tabled - reportedly based on an equation that looks at a dealer's previous year's sales against the balance of time left on the agreement, which is then multiplied by a dollar figure that represents the average profit margin on a new car sale - provide a clear indication of what the remaining offers will be.

However, Holden maintains that the process is ongoing.

“Different dealers will take different approaches to their commercial negotiations around compensation," read the statement. "We also acknowledge that responses can be emotional as we work through an amicable solution to a difficult situation for all."

Holden also insists that any offers tabled are in the best interests of the dealers.

“We believe the compensation to be fair. We are disappointed a small number of dealers are choosing to raise their issues in the public domain, rather than raising them with us.”

The potential compensation payouts for the US company could spiral into the hundreds of millions of dollars, with at least 203 Holden dealerships in line for compensation.

GM has already admitted that retreating from Australia will cost it at least US$1 billion.

Holden closure 2020

Holden's head office in Melbourne

Holden dealer franchise agreements were originally meant to extend through to the end of 2022 before last week’s shock announcement.

General Motors is in the midst of a worldwide cost-cutting spree as it seeks to future-proof against an impending turndown in the industry, and well as seeking to fund research and development into electrification.

It has closed operations in Russia, the UK and Germany over the last three years, as well as shuttering plants and laying off more than 4000 staff in the US.

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The Australian federal government revealed last week it was not consulted about General Motor's decision to axe the iconic Australian brand and cease sales and operations in Australia and New Zealand.

An angry Morrison (below) said Australians will be fuming after Holden allowed its business to "wither away" after years of receiving taxpayer-funded subsidies.

Australian Prime Minister Scott Morrison (centre) is seen during the Bathurst 1000 V8 Super Cars Championship at Mount Panorama Motor Racing Circuit in Bathurst, Sunday, October 7, 2018. The Bathurst 1000 is the most famed race in the V8 Super Car calendar, fought out over 1000kms, the event draws fans from all over the country to the New South Wales town of Bathurst. (AAP Image/Brendan Esposito)

"I'm disappointed, but not surprised, but I am angry like I think many Australians would be. Australian taxpayers put billions into this, into this multinational company and they let the brand just wither away on their watch," he told reporters last week.

"And now they're leaving it behind. And I think that's very disappointing, that over many years, more than $2 billion, I understand, was directly provided to General Motors for the Holden operations."

The prime minister committed his government to ensure the welfare of the 600 workers who will lose their jobs at Holden.

"I'll tell you what we'll do, though," he said. "We'll look after the workers who have been left behind, and will work with them to ensure that they can be able to move into new industries."

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