E-Commerce Helps Drive Record Results

Car maker GM credits e-commerce with strong financial results

GM, reporting record sales and earnings for last year, credited its e-commerce ventures in part for its strong financial showing.

GM reported 1999 revenue of $176 billion, up 13.6% from 1998, and earnings of $5.6 billion, up from $3 billion.

The report came as GM in Detroit and Commerce One in California, announced an agreement to incorporate the business-to-business supply-chainmanagement services of i2 Technologies in Dallas into the GM TradeXchange open online marketplace.

GM said the deal will help move its global supply chain to the site. The automaker spends $87 billion annually with 30,000 suppliers worldwide.

The i2 capability wouldgive the GM/Commerce One exchange the same supply-chain planning capability that Ford and Oracle plan to offer online.

The i2 deal will allow GMto “be able to quickly create stronger, leaner and more efficient supply chains,” according to Harold Kutner, GM group vice president of worldwide purchasing.

“The goal with GM Trade-Xchange is not to move the costs around the supply chain, but to reduce the costs of all our suppliers,” he said.

GM Chairman John F. Smith Jr. listed the automaker’s “aggressive move into e-commerce, including the establishment of e-GM and GM Trade-Xchange,” as “being very significant” among several stepsresponsible for the rise in sales and profits last year.

He also attributed the gains to GM’s corporate restructuring, which separated GM from Delphi Automotive Systems, Hughes Defense and EDS, as well as global integration of auto operations.

Industry analyst Laurie Orlov at Forrester Research in Boston said GM’s procurement efforts can lower supply costs. But she said she questions the long-term benefits of a major automaker’s pursuing a separate e-commerce business.

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