The top consumer and business watchdog has completed its investigation into Holden’s shock shutdown in Australia, but legal battles continue with US car giant General Motors over unreasonable claims for sudden dealer closures.
The Australian Competition and Consumer Commission – the country’s highest consumer and business watchdog – has completed its investigation into the shock shutdown of Holden and the impact on car owners and dealers.
However, the American car giant General Motors – which operated under the Holden brand in Australia from 1948 to the end of 2020 – is still the subject of a class action lawsuit by 11 former Holden dealers, who claim that they have not been fairly compensated for the sudden exhibition closures and “siesmisk”Disruptions in their business.
A statement issued by the ACCC today said: “Shortly after Holden’s announcement (in February 2020 that it is leaving Australia), the ACCC received a number of complaints from dealers who believed Holden had known that General Motors would withdraw the Holden brand. from Australia for many months before they publicly announced it, and had approved new dealer acquisitions during this time and encouraged some dealers to continue investing in their dealers, including by expanding or renovating their premises. “
ACCC Chair Rod Sims said: “Many Holden dealers felt badly let down by Holden and had invested significant sums in the dealers who would soon stand still.
“We started an investigation into Holden’s behavior toward its franchisee dealers because Holden’s behavior appeared to be very worrying.”
Sir. Sims said that although the ACCC had “concerns about Holden’s treatment of some of its dealers,” the watchdog decided not to pursue the matter further in the event that an action by the ACCC could “anticipate the private actions taken by dealers.”
Sims said the decision not to pursue further action was “a difficult decision based on a series of considerations. The team’s behavior has done much to harm the General Motors brand in Australia and perhaps beyond.”
However, aggrieved Holden dealers can still have their day in court, with 11 dealers having already filed a class action lawsuit against the American car giant.
“General Motors has not come on the scene yet,” said James Voortman, CEO of the Australian Automotive Dealers Association, which represents 3,500 nationwide showrooms and their 50,000 employees.
“General Motors is still in court with a number of its dealers, and the ACCC has not yet ruled out further possible action in relation to General Motors revoking its ‘lifetime’ service price guarantees,” said Mr. Voortman.
In response to General Motors’ decision to quietly drop ‘lifetime’ guaranteed service price package in the wake of the Holden shutdown, the ACCC said: “Separately, the ACCC is still assessing whether Holden’s car service schemes, including Holden’s decision to end its ‘lifetime’ limited price service program, raise any issues under Australian consumer law.”
In addition, a number of former Holden dealers – speak to Drive on condition of anonymity – has in recent weeks accused General Motors of using delay tactics in connection with their outstanding lawsuits and of trying to break up the class action lawsuit by dealing with each case separately.
Today’s announcement from the ACCC – and the ongoing lawsuit against General Motors – means the Holden shutdown case is far from over.
The ACCC said it was obliged to intervene on behalf of Holden dealers in May 2020, after the watchdog received complaints that General Motors had set an “arbitrary deadline for dealers to accept their proposed compensation package”, meaning that “dealers would have been forced to choose whether to accept the compensation offer before concluding a dispute settlement process.”
Following pressure from the ACCC, the deadline was extended and most dealers eventually accepted the compensation offered by General Motors.
“Importantly,” the ACCC noted today, “others (dealers) started private lawsuits.”
“The way Holden withdrew from Australia and managed the process and its relationships with longtime loyal dealers should serve as a lesson to all franchisors on what not to do to manage their relationship with franchisees and treat them fairly and with respect, ” he said. said Sims.