General Motors has come out swinging over criticism levelled at its new GM Specialty Vehicles brand.
The American automotive giant has come under fire for launching a new business in Australia just months after suddenly shuttering the legendary Holden brand.
Peak body for Australian car dealers, the AADA, this week questioned whether Holden will be able meet its legal obligation to support its fleet of 1.6 million cars for the next 10 years after the foundation of GMSV.
“We need to have a good look at this,” said James Voortman, AADA CEO.
“There are 1.6 million Holdens on the roads. There are unknown liabilities associated to those cars.
“There could be a massive recall of the ilk of Takata, there could be countless known faults that occur with one of their models, and we need to know they’ve set aside the funds to rectify those claims.
“That is in the interests of consumers, but also the dealers. Dealers who have service contracts will be asked to repair those cars, and under law they should be indemnified by General Motors.”
General Motors today said it’s “100 per cent committed to supporting Holden customers and their 1.6 million Holden vehicles with after sales service and parts for at least the next 10 years through its nationwide network of Holden service outlets, and will fulfil all commitments to Holden dealers”.
Mr Voortman called for GM to once again face a Senate hearing to prove “the money is there” for Holden to fulfil its legal obligations, despite the launch of GM Specialty Vehicles.
The AADA also resurfaced calls for an ASIC investigation into ‘phoenixing’ – when a business is shuttered and has its assets transferred to another entity which rises from the ashes to play the same role without previous debts or obligations.
General Motors labelled any allegations of phoenixing “simply absurd”.
“GMSV is a very different business which will compete in niche luxury and performance segments, not the mass market,” a company spokesperson said.
“GM Holden flatly rejects the spurious allegations of phoenixing. It’s a shame some parties seem to be out to talk down a new business venture employing hundreds of Australians before it even begins.”
It plans to have GM Specialty Vehicles up and running before the end of 2020, with many current HSV dealers set to transition to the new brand.
A GMSV spokesperson said the network is being finalised, but confirmed “many HSV dealers are likely to become GMSV dealers”.
There were more than 60 active HSV dealers when General Motors announced it would be leaving Australia earlier this year, but whether all of those will become GMSV showrooms isn’t clear.
General Motors currently has a staff of 200 in Australia, and says the establishment of GMSV indirectly supports more than 150 manufacturing jobs.