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Sat, Feb 04, 2006 - Page 12 News List

GM to invest US$15 billion in information technology


General Motors Corp awarded billions of dollars in information-technology contracts to Electronic Data Systems Corp (EDS), IBM Corp and other companies on Thursday in what EDS described as the largest commercial contract bidding process in the history of the tech industry.

GM said it plans to spend approximately US$15 billion on information technology over the next five years. About half that amount was awarded on Thursday in five-year contracts, for everything from vehicle design systems to manufacturing support to global supply chain management.

GM's current 10-year contract with EDS expires in June, so GM began a rebidding process two years ago. GM spun off EDS in 1996, and the company has held about two-thirds of GM's business.

EDS, which is based in Plano, Texas, will continue to have the most business with GM, although it will have somewhat less than it has today under the new contract, GM said. EDS said it won 70 percent of the GM contracts it pursued, worth US$3.8 billion over five years.

The company had been getting US$2 billion a year from GM under its old contract.

Computer services firm Capgemini was one of the biggest winners. The Paris-based company said it won all six contracts it bid on and will get US$500 million for consulting and support for GM's sales and dealer systems. Capgemini's last contract with GM was worth US$75 million, spokeswoman Dafina McMillan said.

GM also is expanding its current business with IBM and Hewlett-Packard Co HP, based in Palo Alto, California, said its contract was worth US$700 million, while IBM said its contract was worth US$500 million.

GM is also expanding business with Wipro Ltd, which is based in Bangalore, India. Wipro said its contract could exceed US$300 million. The company collected US$35 million in revenue from GM last year, Wipro chief financial officer Suresh Senapathy said.

Covisint, a subsidiary of Detroit-based Compuware Corp, was also awarded a contract but didn't reveal an amount.

GM broke its information technology work into 40 segments and then bid out the contracts. GM said it will name other partners toward the end of the year, when its telecommunications contracts expire.

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