Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

This is yet another speech I need to make on franchising. I speak on an abuse of corporate power by an overseas car manufacturer Mercedes Benz to squeeze their Australian Mercedes Benz car dealer network dry. This attack on Australian businesses and the workers in Mercedes Benz dealerships, and the apprentices and trainees who work there, cannot go unaddressed. The government says it supports business. Well, now is the time to act to protect Australians from attack by a big overseas corporate.

Mercedes Benz has forced its dealers under protest to sign up to a new agency model without adequate consultation. Almost every dealer sent a letter to Mercedes Benz, following that moment of signing, outlining their strong concerns with the proposed model and recording that they were signing under duress. There's no talk from Mercedes Benz of compensation for lost revenue under the new structure and no contrition for the strong-arming of decent Australian businesses. What we're seeing is just another example of a powerful corporation forcing its will and its lust for profits over jobs on its own franchisees.

Mercedes Benz has not provided any written indication they will continue agreements with any of their dealers beyond a four-year contract, leaving dealers on tenterhooks for who knows how long. Mercedes Benz have completely ignored the spirit of the Senate inquiry into the relationship between car manufacturers and car dealers in Australia. Rather than take heed of the report that spoke to the constant abuse of the trust and the power that OEMs have, Mercedes Benz have instead tried to usher in a new era of exploitative practice, thumbing their nose at the government and our Australian law.

The Federal Chamber of Automotive Industries, which is the voice of Mercedes Benz OEM in Australia and other big overseas car manufacturers, claim that basic regulation of the industry would come at a cost to the consumers, but that simply isn't true. In fact, the lack of adequate regulation has been revealed by Honda's experience in Australia in the last year. Like Mercedes Benz, Honda forced its dealers into an agency model, and sales have dived as the Honda OEM cut out available models, points of access to service have decreased and, instead of diving, prices have actually increased.

Let's be clear about who's in this high-stakes game. The FCAI is just supporting more offshore profits, fewer jobs and less apprenticeship opportunities for Australia. Mercedes Benz is not acting in good faith as a good corporate citizen; it's piggybacking on the goodwill and the hard work of these car dealers, who have invested significant capital, energy and time into building their customer bases and relationships. They're really seeking to steal that data for their own profit.

It's no wonder that the dealer networks are now forming a legal action against Mercedes Benz. Eighty per cent of the Mercedes Benz dealers have filed a $650 million lawsuit to seek justice from Mercedes. This is a seminal moment in the history of franchising in the country. It's a battle to decide if a foreign OEM will force a model on the franchisees that will see Australians pay more for cars, have less competition and remove the ability to shop around. I urge Mercedes Benz to return to the negotiating table in good faith and consult with its franchisees and do a decent deal.

Senate adjourned at 20:00