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Technology Stocks : Forecross Corporation : Y/2000 -- Ignore unavailable to you. Want to Upgrade?

To: Ruyi who wrote (1187)	6/23/1998 12:45:00 AM
From: AD	Respond to of 1654

GM's Y2K assurances come under scrutiny Matt Hamblen News 06/22/1998 As the world's largest publicly traded company, General Motors Corp. arguably faces the biggest year 2000 problem in the private sector. With $178 billion in annual revenue, 647,000 employees and 350 factories worldwide, GM has identified more than 500,000 devices and systems that could present problems. And it must worry about the interoperability of its data networks with 100,000 parts suppliers. Despite such odds, a company spokesman last week boldly stated that the year 2000 problem won't have a significant impact on GM's business. "We've got a pretty heavyweight year 2000 program because we have to," said John Ahearne, a spokesman for GM's information systems, based in Detroit. GM has already finished its assessment of devices and systems and is working with critical suppliers to find workarounds if it can't be sure their year 2000 programs will work. Despite that confidence, GM landed on a list of other large companies that came under congressional fire recently for providing inadequate year 2000 information to investors in Securities and Exchange Commission (SEC) filings. SOME QUESTIONS One economist who testified wondered why GM would declare in its most recent annual report that it expects to spend $360 million to $500 million and have modifications completed by Dec. 31, 1998, yet didn't mention anything about year 2000 in its subsequent quarterly report. Testing will begin next year. That level of spending over several years is a small portion of the automaker's $4 billion annual information technology budget. In an interview, economist Edward Yardeni at Deutsche Bank Securities in New York said he was "amazed" GM would make such statements, given that GM Chief Information Officer Ralph Szygenda was quoted in a Fortune article in April saying there are "catastrophic problems" related to year 2000 in every GM plant. Ahearne, who attended the Fortune interview, said the CIO's comment was taken out of context. When he first visited plants in June 1996 after signing on as CIO, Szygenda said, "This stuff has to be fixed, or it could be catastrophic," Ahearne recalled. Szygenda wasn't available to comment last week, and all questions were referred to Ahearne. Since 1996, GM has made "tremendous" progress, having assessed the problem last year and devoted this year to remediation, Ahearne said. "I don't really think there's the potential for anything catastrophic to happen," he said. Yardeni said it is contradictory that GM could devote most of last year to assessment and expect remediation to last only a year, as stated in SEC filings. But Ahearne said that timetable is possible because assessment was done by teams on and off throughout last year. Analyst Steven L. Hock, president of Triaxsys Research LLC in Missoula, Mont., said GM ranks at the bottom among companies in the Fortune 250 for the percentage of year 2000 funds already spent compared with the estimated total project cost. GM isn't hiding information by not including year 2000 information in its quarterly report, Ahearne said. One area of uncertainty about year 2000 readiness is addressed in GM's annual report regarding how GM communicates with its 100,000 parts suppliers. GM is checking and testing electronic data interchange interfaces with suppliers at 40,000 critical supply sites, Ahearne said. --------------------------------------------------------------------------------