Federal inquiry into Holden’s exit from Australia

A FEDERAL parliamentary inquiry will be held into General Motors’ decision to withdraw the Holden brand and operations in Australia.

The push for a Senate probe into GM’s shock move – announced earlier this month and to cost the US auto giant more than $1.6 billion (including the related exit from New Zealand and Thailand) – was led by the Labor party and was unopposed when put to a vote in the upper house on Thursday.

The terms of reference for the Senate Standing Committee on Education and Employment, as moved by ALP Senator for Western Australia Louise Pratt, will include the impacts of GM’s decision on Holden employees, the dealer network, the company’s research and development facilities, and on vehicle owners, the latter including service and repair.

It will also cover the role of the franchise code and the government’s proposed dealership amendments to the code, and “government policy settings on manufacturing, research and development, business support and transition, and employee support”.

General Motors delivered the devastating news on February 17 that it was pulling up stumps with Holden in Australia, taking with it around 600 company jobs and sending many thousands more out of work as some 200 franchised dealerships are also closed by the end of this year.

GM’s Australian-based design and engineering operations, and other affiliate operations such as financial services and car-sharing, are also being disbanded, leaving only a servicing and repair network and a small specialist American vehicle retail presence that is still to be finalised. 

Prime minister Scott Morrison and industry minister Karen Andrews met with Holden dealers and the Australian Automotive Dealer Association (AADA) earlier this week to discuss the predicament faced by the retail network, and said “the government will be supporting these dealers by watching very closely to see that they get a fair deal”.

The AADA, which is the peak industry body representing franchised new-vehicle dealers, has today welcomed the announcement of the Senate inquiry.

“This inquiry is crucial as the way in which Holden is allowed to exit Australia will set the benchmark for other offshore car manufacturers considering an exit from the country, a rationalisation of their network or a change in their distribution model,” said AADA chief executive James Voortman.

“The decision of the Senate to review the impacts of GM’s decision is very welcome, particularly as it will also look at the broader context of the franchising code and its role in this mess.

“We look forward to working with the Senate on this inquiry and to keep the prime minister, whom we met with yesterday, abreast of developments.

“The AADA is working closely with our Holden members, as well as the government and Senate to ensure that the hardworking Australian businesses and their employees are properly looked after.”

Mr Voortman said the AADA was not only shocked by GM’s decision and the way it was communicated, but “we have been even more shocked by reports from our members on the grossly inadequate compensation on offer”.

“The withdrawal of GM from the Australian market leaves around two hundred dealerships in the lurch, and up to nine thousand workers out of a job,” he said.

“Holden dealers invested significant capital in facilities, stock and equipment. Many signed up to long-term leases. They employed people in their businesses and took on apprentices.

“All of these decisions were made in good faith based on commitments from Holden that they were in Australia for the long haul.”