Australian politician asks GM to sell him Holden brand for $1 Aussie
GM's February decision to shutter the Holden brand in Australia by 2021 was a massive shock, but only the first. The aftershocks continue to whip up turmoil. The latest jolt comes courtesy of a federal government senator from the state of Queensland, James McGrath. For any who don't know, Queensland could be compared to Florida in terms of antics, with a better accent and more panache. McGrath made what CarAdvice called "an extraordinary speech" in Australia's federal parliament that included the lines, "General Motors may think the rich history of the Holden brand is worthless, but I think it’s priceless. If General Motors (thinks) the brand is worth nothing then hand the brand back to Australia. Give it back to the Holden dealers. Indeed, I’m happy to purchase the Holden brand off General Motors for a dollar. I will send you, [GM CEO] Ms. Barra, a dollar in the post and you can give us the Holden brand back and we will give it to the Holden dealers."
First, a brief recap of how it got to that point. After the closure announcement, GM made a compensation offer to the 185 dealer groups operating 203 Holden storefronts in the country. The math was "based on each showroom’s average net profit from all new Holdens sold over three years from 2017 to 2019 – but based volume on the number of vehicles sold in 2019 – [that amount forecast] over the remaining term of their franchise agreements which were due to expire at the end of 2022," and took into account "unamortised costs of facilities such as showrooms and signage." The dealers unanimously rejected compensation paying from $100,000 to $2.4 million AUD depending on the store, roughly $1,500 per new car sold. Then they met with Australia's prime minister over the matter and hired law firm HWL Ebsworth (HWLE) to handle their claims.
HWLE ran numbers based on the dealers' requests and came up with a compensation figure of $6,110 per new car sold, plus a lot of invective aimed GM's way, including the bombshell that GM planned to close Holden at least five years ago but hid its intentions behind a smokescreen of investments. GM bashed the number, citing "a number of inaccurate claims, assumptions and costs allocations," and knocked back "baseless allegations of unconscionable and misleading conduct which are plainly wrong and unsupported by fact or law." GM appointed PriceWaterhouseCoopers to run an analysis, PWC finding Holden dealers are entitled to anywhere from $350 to $1,409 per new car sold, even less than the original offer. In the midst of all of this, Senator McGrath used what GoAuto called "plain-speaking North Queensland language" to blast GM for having "the ethics of a granny-smacking purse-snatcher" in its negotiations with Holden franchisees.
McGrath touched on that comment again in his parliament speech, doubled down with, "And nothing I have heard from Holden dealers throughout Australia since then has changed my view or that of my colleagues in this parliament," accused GM of "American legal chicanery" by using the coronavirus pandemic to drag out negotiations and compel "further oppressive agreements," called CEO Marry Barra "Gordon Gecko on steroids," made the offer to send Barra $1 Aussie, and closed with, "Australia and Holden dealers want a fair deal. They don’t want a special deal, they just want a fair deal."
If not Barra, we're sure someone at GM would be thrilled to send McGrath one U.S. dollar, worth about $1.30 Aussie, and let him keep the change in order to be to done with Holden. We're equally sure Holden dealers would consider that "the worst trade deal maybe ever signed anywhere," with a dollar to split between them and the Aussie taxpaying public their only chance for compensation.
In response to McGrath's speech, a Holden rep told CarAdvice, "GM Holden firmly believes the compensation offer to its dealers is fair, and strongly disagrees with any assertion that it has acted improperly. We remain open to meet for a constructive purpose with dealers." Calm for now, but the next shock can't be far away.
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