WRAP: GM, Ford, DaimlerChrysler to form online parts-buying venture ...
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(adds further detail, company comment in paras 10-13)
By Kevin Kelly and Michael Strong, Bridge News
Detroit--Feb 25--Three of the world's largest and most recognized
automotive manufacturers managed to overcome their competitive
differences on Friday to form the world's largest automotive-based
eBay. General Motors Corp., Ford Motor Co. and DaimlerChrysler AG, the
three largest carmakers in the U.S., said they are combining to form an
online auto-parts purchasing venture that will create the world's
biggest virtual marketplace.
The companies said all auto manufacturers around the world, as well as
their suppliers, partners and dealers, will be able to participate in
the new World Wide Web portal, and that they hope the marketplace could
be expanded to encompass other industries.
GM, Ford and DaimlerChrysler will have equal ownership in the venture,
which will operate as a separate business, but until the agreement is
finalized, the companies will operate their current exchanges--such as
Ford's Autoxchange and GM's TradeXchange--which will continue to offer
purchasing, bidding and online sourcing auctions.
"By joining together, we can further increase the pace of
implementation, thereby accelerating the benefits to everyone
involved," said GM president Richard Wagoner. "We are excited about the
opportunity to build on what each of us started separately and create
the best trading exchange in the world."
Wagoner's sentiments were echoed by Ford chief executive Jacques
Nasser. "Today's announcement is another example of how the Internet is
transforming every piece of our company and our industry. We'll push
this transformation even further to bring sustainable benefits to our
customers, our suppliers and our dealers," he said.
DaimlerChrylser chairman Juergen Schrempp said his company decided to
join with Ford and GM to help boost their global penetration in the
supplier marketplace.
"DaimlerChrysler's plan for a separate exchange came together with
Ford's and GM's," he said. "We bring a global presence, large volume,
and excellent supplier relationships to the new venture."
Both Oracle Corp. and Commerce One Inc., the software makers, will be
partners in the venture, although it is undetermined who will take the
lead with technology on the portal.
In addition to the cost savings that each automaker should achieve
with the new site, the exchange is expected to become a significant
source of revenue for the automakers, from commissions, transaction
fees and service fees.
Commissions alone, which range from 0.5 percent to 1.5 percent, should
produce $2.4 billion in revenues.
Kelley said an initial public offering of shares in the new venture
could come as early as the fourth quarter of this year, but the
companies said they wanted to see revenue numbers before attempting a
spin-off. It was not known how many additional automakers would be
involved in the exchange, but Kelley confirmed that talks with
Nissan/Renault had already taken place. Toyota is also expected to
express an interest shortly.
The markets welcomed the new venture, as GM stock rose $1.625 in
midday trade to $76.875, Ford climbed $1.25 to $43.75 and
DaimlerChrysler was up $2.5625 at $64.50. End
[symbols:US;F:US;GM:US;DCX]
The Bridge ID for this story is 05973
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