Car manufacturers to pay for offering Aussies a raw deal
Car manufacturers who abandon Australia after years of raking in billions of taxpayer dollars will be forced to fairly compensate family-owned local dealerships and face fines up to $10 million for wrongdoing.
The federal government will today (FRI) unveil changes to franchising laws to address the current power imbalance between multinational car manufacturers and Australian business owners, who have been repeatedly pushed into financial ruin when big brands, like Holden, leave the country.
The changes include increasing the maximum penalties for big businesses from just $66,100 to $10m or ten per cent of annual turnover, whichever is highest to ensure car companies "think twice" before changing the terms and conditions of contracts with local dealers.
The voluntary "Best Practice Principles" will be made mandatory to ensure dealers get fair compensation, and the government will develop a conflict resolution code requiring companies to go into arbitration if negotiations fail.
Australia's automotive dealers employed more than 60,000 Australians and contribute more than $12 billion to the economy, including $3.7bn in NSW alone.
Prime Minister Scott Morrison said the government would "stand up" for Australian jobs and businesses.
"We stood up to Big Tech companies and we will stand up to multinational car companies who are riding roughshod over many family-owned Australia car dealers," he said.
"By protecting these businesses, we will be protecting the thousands of jobs that rely on the sector, including many apprentices."
Employment and Skills Minister Michaelia Cash said for "too long" international companies had "taken the taxpayer for a ride".
"It's now time to level the playing field," she said.
"We are sending a message to these large companies who have been squeezing family businesses; deal fairly or pay the price."
Mark Palmer was the dealer principal of the Holden Dealership in Inverell in regional NSW and said despite representing the brand since 1948, the business got no prior warning from General Motors before they announced their departure.
Mr Palmer said GM issued a "take it or leave it compensation offer" only.
It was made clear there would be no negotiation on their fist and final offer, which all dealers described as "inadequate".
Mr Palmer is currently being forced to pursue GM through the courts - a small Inverell Dealership against a Fortune 500 company.
A senate committee examining the withdrawal of Holden from Australia has been told by one franchisee who wished to remain anonymous that the impact of the sudden move had been "devastating".
Originally published as Car manufacturers to pay for offering Aussies a raw deal