General Motors $7.5 billion outsourcing deal

3 February 2006 Automotive giant General Motors (GM) has announced the winners of a multi-billion dollar tender for its IT outsourcing business.

This follows a two-year tender process and marks one of the most complex IT outsourcing deals ever by a single company.

“This is a significant milestone for General Motors and its Information Systems &Services Group,” said Ralph Szygenda, the CIO at General Motors.

“Of critical importance is the focus we have had on driving innovation and supporting future globalisation and digitisation of the company.”

IT services giant EDS will retain just over half of the allotted budget, having been awarded a contract of $3.8 billion over five years.

EDS was once part of GM, prior to being spun out. It held the current contract to support GM’s IT infrastructure. That 10-year deal expires in June.

The other half has been split between computer giant IBM, India-based Wipro, Hewlett-Packard (HP), Compuware and French IT services company, CapGemini.

The outsourcing work will encompass operations and support roles in areas such as product development, manufacturing and supply chain, and financial services.

The deal is part of a restructuring plan by the automotive company following its lacklustre financial performance. GM lost $8.6 billion in 2005 and plans to cut 30,000 jobs by 2008.

GM will outsource another $7.5 billion to telecommunications companies later this year.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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