Shortly after General Motors announced it will kill off the Holden brand in both Australia and New Zealand, it’s been confirmed the network of Holden dealerships are working with law firm JWL Ebsworth and forensic accountants KPMG to negotiate compensation offers.
According to Australia’s Drive, Holden dealers believe the compensation offers they are receiving are “grossly inadequate.” It is understood that representatives from General Motors are offering compensation packages to each and every dealership through face-to-face discussions. Most dealerships have already received their offers and those that haven’t have been able to calculate their likely compensation packages.
Following GM’s announcement of abandoning right-hand drive markets, the automaker revealed it had set aside $1.1 billion to close operations. Despite this, it is claimed the compensation bill to Holden dealers in Australia alone will likely cost in excess of $2 billion.
Read More: GM Kills Holden Brand As It Withdraws From Right-Hand Drive Markets
Many dealerships were encouraged by General Motors to invest in new showrooms as well as expensive renovations and new signage despite the car manufacturer already knowing that it was going to pull out of Australia. Some dealers reportedly coughed up between $3 million and $6.5 million for renovations while many others are locked into long term leases.
General Motors is offering compensation packages based on dealership’s net profit from all Holdens sold over three years from 2017 to 2019 and the forecasted amount over the remaining term of franchise agreements due to expire at the end of 2022.
“Holden is doing the right thing by its dealers during this difficult time. We believe the offer is fair,” the company said in a statement.
