Holden dealerships across Australia are threatening to pursue legal action against General Motors for the automaker’s decision to shut down the Australian brand, Car Advice reports.
The Australian network of 185 Holden dealers asserts that General Motors knew there was a risk it would close Holden. Despite this, the American company asked dealers to spend millions on showroom upgrades and assured them that it was committed to the brand and its long-term future.
A letter sent from HBL Ebsworth lawyers, acting on behalf of Holden dealers and viewed by Car Advice, alleges that GM and Holden “have known for a considerable period of time that (it) was considering exiting the right-hand-drive market which would result in … Holden’s business being unviable”.
The letter adds that “if the dispute cannot be resolved, legal proceedings will be commenced in Australia against Holden and (General Motors).”
General Motors is currently in compensation negotiations with the 185 local Holden dealerships but many dealers feel compensation has been “grossly inadequate.” Dealers claim compensation offers amount to roughly $1,500 per cold sold over a nominated period but accounting firm KPMG says dealers are in fact owed approximately $6,100 per car sold over the period.
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In response to news that dealers could pursue legal action, Holden released a statement saying it believes the compensation offered has been fair.
“Holden does not comment on actual or threatened litigation. Holden strongly disagrees with any assertion that it has acted improperly. Holden believes the compensation offer to its dealers is fair.”
