Car Giant General Motors 'dot-coms' Itself

Imagine going to an online car site from your Web television and ordering the customized automobile of your dreams in the same way you would order a cheap, fast PC from Dell or Gateway, and instantly financing that car just like you would get a low-rate mortgage from e-Loan.

Then imagine that shiny new car showing up at your doorstep a few days later with a voice-activated, Internet-enabled mobile office and full media center in the back seat, with the car company providing the wireless connectivity and myriad other Web-based services through the life of the car.

That is what General Motors -- the largest company in the world -- is imagining with the creation today of an e-GM division within the Detroit-based automotive giant.

GM has made a bold move for an industry not so used to sudden change by pulling all its electronic business-to-business and business-to-consumer, as well as in-vehicle wireless and Web-based services, together under a single chain of command.

The e-GM division, it is fair to say, is not your parent's Internet. And it is the new crop of young car buyers coming on the scene with more computer savvy than showroom bravado that GM hopes to lure to its fast-evolving, direct buying, services-oriented car purchasing model.

While such direct-buying services are now available for U.S.-based Cadillac buyers, GM is obviously moving quickly to tune-up the process behind online car buying and drive it to more types of cars and buyers, and in many more areas of the world.

The key to e-GM, of course, is technology. It may be an interoperability nightmare on a galactic scale, but GM plans to link and integrate its 100 separate Web sites, many supplier and dealer channels, hundreds of factory inventory and ordering systems, and offer customers a "single view" of the car buying and servicing experience.

The shift is not without risk, because car dealers -- the bane of buyers and financial life-blood of car companies -- stand to lose their stature as the go-between in the now-typical $20,000 car purchase. GM says its not abandoning its 15,000 dealers, just "harmonizing" the distribution channels. But suffice to say that a move to the Web means a huge upheaval in the way GM and its dealers have done business for more than 75 years.

In fact, some dealers could become relegated to service centers for cars that can often go 100,000 miles between tune-ups, except for oil changes.

GM's move to more systematically and strategically embrace I-commerce may also be a harbinger to other companies and industries contemplating a reorganization around a Web model. The message is that virtually no business, no matter how big or complex, can operate independent of the wired world for long.

"We want to put a bear hug on e-commerce," said Mark Hogan, new chief executive of the e-GM business unit, to be based in Detroit. "Our objective is simple: We want to change GM from being an auto company that moves on car time, to a car company that works on Internet time."

GM is not alone in recognizing how the automotive world is facing a new era. Ford Motor also is expected to soon announce its plan to consolidate its Internet strategies and services.

While GM declined to offer specifics of the technology or platforms it intends to employ in its new organization, officials said they will spend more than any other car maker on the dot-com task. Apparently the sky's the limit on IT spending: "Just get it done," has been the message from GM CEO Jack Smith, who along with other top brass was on hand Tuesday at a press conference announcing e-GM.

Also on hand was Sun Microsystems CEO Scott McNealy, a native of the Detroit area whose father was an American Motor executive. Sun already supplies platforms for many of GM's Web sites, but a deeper partnership between Sun, the Sun-Netscape Alliance, and Sun partner AOL seems nearly a foregone conclusion.

"GM really gets it. And it's fun to be here. An automobile is just a Java browser with tires," quipped McNealy, who went on the say that GM has a huge potential for offering many new and novel connected services to car drivers during the average 80 minutes a day they spend in their cars.

There's also the work-on-the-road motive for Sun's workforce. McNealy said he prefers to see his sales force in an Internet-enabled car than in an office. "I want a Java car instead of a sales office for my sales people. My sales reps don't get an office, they get a nice Cadillac -- it's a lot cheaper. The car should be the docking station," said McNealy.

If GM is right and is able to cut its car-making costs by up to 10 percent through business-to-business e-commerce, and give a better car buying and servicing experience to buyers, the future stakes are fabulous.

George Colony, founder and chief executive at Forrester Research in Cambridge, Mass. predicts that by 2003, some 500,000 of the 16 million cars bought will be via direct order. And 8 million of those cars will be researched or in some way bought with Web assistance, giving GM a tidy side-business as a car Web portal.

"The early Internet economy we have now is only small vibration of the changes we'll see," said Colony. "It will be General Electric, GM, and Wal-Mart that will harmonize their channels and create a single experience for the customer across these channels. This is where the action is going to happen. This e-GM is the Manhattan Project of e-commerce."

General Motors Co., in Detroit, is at www.gm.com.

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