Labor call to support GM dealer network

Labor is calling for JobKeeper to be extended for the nation’s Holden Dealers, and for the franchise code to be reformed for automotive dealers.

Once Australia’s biggest selling marque, General Motors’ Holden has withdrawn from the market. Picture: Liam Kidston.

Labor is calling for JobKeeper to be extended for the nation’s Holden Dealers, and for the franchise code to be reformed for automotive dealers, claiming vendors for the iconic brand “are on the brink of financial ruin” following General Motor Holden’s decision to withdraw the brand earlier this year.

In a letter to Scott Morrison NSW Labor Senator Deborah O’Neill wrote that the “Holden/GM catastrophe would likely have been preventable with timely amendments to the franchising code,” or the creation of a stand-alone code for car dealers.

The letter comes after a majority of Australia’s 185 Holden Dealers accepted a compensation package from General Motors Holden they previously rejected, with dealer groups saying they had no choice after the COVID-19 pandemic drove new car sales to new lows in May and April.

Senator O’Neill called on the Prime Minister to spearhead the immediate introduction to the code governing relations between franchisors and franchisees, including the introduction of “meaningful and binding arbitration” between parties, “transparent contracts,” and “increased fines for breach of the contract.”

“This does not meet the scale of reform needed in the franchising sector but it will provide timely relief and hope to the car dealers,” Senator O’Neill wrote.

Senator O’Neill also called on the Prime Minister to extend the $70bn JobKeeper wage subsidy plan past September for Holden dealers.

“Without support, they look likely to lose 30 per cent of their current workforce,” the letter says. “That’s 2,500 people who need to hold on to their jobs to feed and clothe their households and maintain the stimulatory action of their wages in the local economy.”

The letter also requests that rent reliefs be extended to Holden dealers, with Senator O’Neill warning that “the next six months will be crucial to the survival of these businesses.”

Under the terms of the compensation package agreed to by most Holden dealers, GM will provide them with a settlement of $1500 per vehicle over the next two and a half years, based on the 2019 dealer volumes, plus the opportunity to serve as an authorised service provider for Holden vehicles for five years.