GM escalates its Y2K preparedness efforts

General Motors last week confirmed it has been escalating its year 2000 preparedness efforts as part of a project the world's largest automaker estimates will cost between $US710 million and $780 million.

GM, which plans to create an unspecified number of year 2000 command centers in Detroit and various international facilities, has begun testing without major incident at its plants and has started work on contingency planning. But the automaker said it has no plans to freeze or lock down any non-year-2000 information technology projects. GM has hundreds of employees dedicated to its year 2000 efforts.

Focus on Testing

"Last year, we focused on remediation, and 1999 will predominantly be for readiness testing, where we run items in their overall environment and make sure everything runs together," said GM spokesman John Ahearne.

Detroit-based Deloitte Consulting LLP partner Joe Bione gave automakers high marks, although he wouldn't say how GM ranks in dealing with year 2000 as compared with its competitors. "The auto industry has led the year 2000 effort, and GM is part of an overall and global program that's at the forefront of Y2K," he said.

GM is taking recommended steps, such as putting together contingency plans and setting up centers to deal with problems, Bione said. That way, "when things happen, you can get the information to one location and figure out how to deal with it," he said.

The automaker kicked off its plant-testing effort in January when it rolled its own and key suppliers' clocks ahead during production at its Lake Orion, Michigan, assembly plant. "There were a few five-minute glitches, but then things went normally," Ahearne said. No problems were reported when the same test was run soon after at GM's Arlington, Texas, assembly plant, he added.

GM said in a Securities and Exchange Commission filing that it "currently believes that the most reasonable likely worst case scenario is that there will be some localized disruption of systems that will affect individual business processes, facilities or suppliers for a short time rather than systemic or long-term problems affecting its business operations as a whole."

Although specific contingency plans won't be put in place until midyear, GM may deploy emergency response teams on a regional or local basis and develop plans for the allocation, stockpiling or re-sourcing of "components and materials that may be critical to our continued production," the automaker said.

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