Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : GM - General Motors -- Ignore unavailable to you. Want to Upgrade?

To: porcupine --''''> who wrote (199)	2/10/1999 8:31:00 PM
From: porcupine --''''>	Read Replies (1) \| Respond to of 543

GM wants to bolster nonauto revenues DETROIT, Jan 11 (Reuters) - General Motors Corp.'s North American president said on Monday the automaker wanted to leverage its customer databases to attract billions of dollars in nonautomotive money through such products as home mortgages. As Walt Disney Co. does with its customers, GM intends to boost profits through household relationships, Ronald Zarrella said at an automotive conference. The company will use its customer lists to build higher-profit businesses like service and parts, insurance, financing, and rentals. The targeted services include on-board communication like GM's OnStar navigation and communication system, entertainment, safety and security, and other personal services, as well as nonauto services like Internet access, digital radio and investing, all on one bill, he said. Many of these businesses have profit margins of as much as 25 percent, compared with 8 percent to 12 percent for more auto-related business. As part of its efforts, GM intends to bring the cost of its OnStar system down so it can be made available on all its vehicles within the next two years, Zarrella said. GM has about 50,000 to 75,000 OnStar subscribers but hopes to build that base enough to encourage independent hardware and software developers to develop programs that could be marketed on the OnStar system, he said. "The ultimate value of OnStar is not in the hardware but to create a subscriber base that can lead to a broader relationship with these customers," Zarrella said. OnStar, which allows subscribers to call an operator through a cell phone to get directions, make restaurant reservations or obtain emergency assistance, is available to Cadillac and some Buick owners for about $22.50 a month plus monthly phone fees and a one-time installation fee of about $1,200. Zarrella said the ultimate goal was to make the system standard in some marques and cheaper than at present in others. He declined to estimate what the initial investment would be other than to say it would be minimal. As part of the relationship-building strategy, the world's largest automaker will target its own employees and retirees before going after higher-end households, Zarrella said. He emphasized that the strategy began with exciting vehicle designs. ((--Detroit Newsroom, 313-870-0200)) Reynolds Russell, Registered Investment Advisor Editor, "Graham and Doddsville Revisited" web.idirect.com Subject 19528 "There are no sure and easy paths to riches in Wall Street or anywhere else." (Benjamin Graham)