Wagoner: GM Embraces IT

DETROIT (04/14/2000) - General Motors Corp. President and soon-to-be CEO Rick Wagoner said he has seen the light about tapping information technology to unleash a river of new revenue from an old-line car manufacturing company.

"The value of good IT and applying it is huge, and there has definitely been a shift at GM," Wagoner said recently during an exclusive interview with Computerworld.

In particular, "the potential value drivers with e-business are as big as anything I've seen in 20 years in the industry," said Wagoner, who will become CEO June 1. New electronic-business initiatives, such as TradeXchange and GM's expanded OnStar program, "have the chance to change our basic business," he added.

He offered GM's new OnStar initiative as a prime example. By 2003, GM will have rolled out 4 million Web-ready cars. Previously, OnStar was installed as a value-added service by dealers.

The company also plans to sell its vehicle-based Internet technology to other carmakers. After that will come a slew of information services delivered to tens of millions of drivers on a subscription basis.

"A customer's automotive experience isn't just their new car or truck anymore," Wagoner said. "Now, we can expand the relationship and revenues plus drive up the stock price, [because] you buy OnStar services every month."

In the just-released 1999 annual report, GM executives also emphasized the vast importance of the Internet coupled with the company's gigantic footprint in the auto market.

"More than 70 million Americans own GM vehicles, and every year more than 8 million people around the world buy new GM vehicles, each of which could be considered a rolling platform for a whole range of in-vehicle communications products and the subscriptions that go along with them," read the letter to shareholders.

GM also has the potential of becoming one of the largest resellers of cellular services, plus it has a built-in audience for car loans and home mortgages offered through its General Motors Acceptance Corp. division, he noted.

One big bonus for GM is that trying out new electronic businesses isn't as costly as trying out new models of cars, Wagoner said. "We're used to a business where you make a billion-dollar bet and see how it turns out five years later," he said.

By comparison, GM has invested $1.6 billion in Internet-based commerce since 1996.

With e-commerce, "we're making smaller bets and finding out immediately," he said.

Join the newsletter!

Error: Please check your email address.

More about Holden- General MotorsOnStar

Show Comments