Just a month or so ago, General Motors rocked Australia and New Zealand's automotive industry by pulling the plug on Holden. While it was a matter of time before it happened, it still came as a shock to all involved.
As expected, the dealerships that sold Holden's vehicles before the closure aren't too happy about all of this, and according to Australia's Car Advice, are gearing up to pursue legal action over the brand's closure.
Before this happens, the dealerships are reportedly attempting to reach a suitable financial negotiation with GM. According to the report, the two parties aren't in agreement as GM is offering A$1,500 for each vehicle sold throughout a certain period.
KPMG, the forensic accounting firm hired by Holden for the project claims that the dealerships should be looking for A$6,100 for each vehicle, a figure more than four times higher than GM's offering. On top of this, NZ dealers are reportedly being offered "almost double".
Unsurprisingly, the battle is shaping up to be Holden and GM against the dealerships as the brand's statement on the matter contradicts what the dealerships are saying. “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.”
While the dealerships have reportedly claimed that this compensation package is "grossly inadequate" General Motors stands by the package, stating that its calculations are based on a period prior to the one leading up to the announcement, where profits were higher than average.
Early estimates by the Holden dealer network claimed that almost 9000 jobs would be affected by the brand's closure, but according to Holden, the reality is a lot different. According to retail network statistics, the number of showroom employees affected is closer to 650, and many of those people were expected to move into different brands.
It seems that Holden dealerships across Australia have managed to empty out stocks since the announcement thanks to large discounts. Holden had forecasted to finish up business by the end of the year, but dealers are predicting that they will sell out by June.
Over here in New Zealand, Holden has sold 810 vehicles in the passenger segment, and 561 in the commercial segment this year. Sales in both segments looked to have dropped following the announcement, but still seem to be holding strong.