AADA SECURES SENATE INQUIRY INTO HOLDEN DEPARTURE

Thanks to AADA’s strong efforts advocating for Holden Dealers in discussions with the Federal Government, the Senate will conduct an inquiry into parent company General Motors’ (GM) withdrawal from Australian operations.

About 9000 Holden dealership employees are set to lose their jobs with around 200 dealerships facing an uncertain future, after GM announced in February that it would wind up the Aussie-as-a-meat-pie brand by the end of the year.

AADA met with Prime Minister Scott Morrison in early March, as did members of the Holden Dealer Council. Holden Dealers have rejected GM’s proposed compensation arrangements as inadequate, and there is talk of a $2 billion legal action.

The Senate Inquiry will be crucial for the future of Australia’s retail automotive industry. The way in which Holden is allowed to exit Australia will set the benchmark for other offshore car manufacturers considering an exit from the country, a rationalisation of their network or a change in their distribution model.
AADA CEO James Voortman has welcomed the announcement of the Senate Inquiry.

“As an industry we were shocked by GM’s decision and the way it was communicated. However, we have been even more shocked by reports from our members on the grossly inadequate compensation on offer,” he said.

“The withdrawal of GM from the Australian market leaves around two hundred dealerships in the lurch, and up to nine thousand workers out of a job.
“Holden Dealers invested significant capital in facilities, stock and equipment. Many signed up to long term leases. They employed people in their businesses and took on apprentices. All of these decisions were made in good faith based on commitments from Holden that they were in Australia for the long-haul.”

Mr Voortman said the decision of the Senate to review the impacts of GM’s decision was very welcome, as it will also look at the broader context of the Franchising Code and its role in this “mess”.

“We look forward to working with the Senate on this inquiry and to keep the Prime Minister abreast of developments,” Mr Voortman said.

“The AADA is working closely with our Holden members, as well as the Government and Senate to ensure that the hard-working Australian businesses and their employees are properly looked after.”

The AADA will be keeping a close eye on the Inquiry and has made a submission to the Senate.

The Inquiry’s Terms of Reference are:

a) the impacts of that decision on:

i. Holden employees;

ii. the Holden dealership network (small and medium sized businesses and family enterprises, and their employees);

iii. the Holden research and development facilities; and

iv. owners of Holden vehicles (including service and repair);.

b) the role of the Franchise Code and the Government’s proposed dealership amendments to the Franchise Code;

c) Government or other policy settings on manufacturing, research and development, business support and transition, and employee support; and

d) any related matters.

When announcing its withdrawal, GM said the Holden brand was no longer competitive in the current market and would be “retired” from sales, design and engineering across Australia and New Zealand by 2021. It is part of the company’s worldwide withdrawal from the manufacture of right-hand drive vehicles.

The announcement drew criticism from the Government, with Prime Minister Scott Morrison saying he was angry the brand was allowed to “wither away”.
Holden closed its Australian manufacturing operations in October 2017, resulting in hundreds of job losses.

Around 800 Holden employees had kept their jobs, including 600 workers in Melbourne responsible for designing cars for the Australian market.

GM International Operations senior vice president, Julian Blissett, said the announcement would mean the “overwhelming majority” of Holden staff would lose their jobs by the end of June 2020.

“This was an agonising decision for us and one we didn’t make lightly or easily,” Mr Blissett told a Melbourne press conference.

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