General Motors encouraged Holden dealers to continue with costly upgrades to their dealerships in the months leading to the iconic Australian brand’s closure, a Senate Inquiry into the company’s operations was told yesterday.
The Australian Automotive Dealers Association's chief executive James Voortman told the inquiry that GM was “incredibly reckless” in allowing dealers to commit to such high levels of investment and subsequently refused to provide a fair compensation deal.
In his opening address, Voortman said: “General Motors seem to be a law unto themselves and are the epitome of a large powerful offshore multinational using its position of power to exploit the smaller businesses it deals with."
“They have set a very dangerous precedent and in the process, they have emboldened other vehicle manufacturers to exploit the imbalance in power that exists between them and their dealers,” he continued.
GM Holden's Australian chairman and managing director Kristian Aquilina denied that GM’s decision to close Holden was known well in advance of its shock announcement in February.
"I just want to put to bed this whole conspiracy theory that it's been a long-held view from General Motors to unwind our operations right across south-east Asia and Australia," he told the inquiry via video link.
Aquilina defended the compensation that the $1500 per vehicle that GM agreed to pay to Holden dealers, pointing out that 90 per cent of dealers had accepted it.
He also told the inquiry the company would continue to provide service and parts to Holden owners for the next 10 years.
"We know the overall package puts dealers in a better position than if they were to continue selling Holdens for the next two and a half years, irrespective of the economic situation that has emerged since that offer," he said.
Voortman agreed that Holden customers would continue to be looked after in terms of parts and service, but called on GM to demonstrate what funds it had put aside to honour its commitments.
“GM does not have a good track record in this area,” he said.
The Senate Inquiry into Holden’s Operations is continuing.
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