GM reportedly to pull e-business unit in-house

After much fanfare surrounding its initial launch, General Motors will merge the e-business unit it created in 1999 back into the corporate organization, according to a report in The Wall Street Journal.

The e-GM unit, which has about 100 employees, will be folded back into GM during the next year as several e-business initiatives are scaled back at the automaker, according to the report.

Mark Hogan, head of the unit, said in the report that e-business remains a key corporate priority for CEO Rick Wagoner, but with the end of the dot-com frenzy, "people are doing a lot less arm waving about it." Hogan said that when e-GM was created it was meant to last only a few years, until e-business became ingrained in GM.

The current staff of the e-business unit will be shifted back into GM, Hogan said.

Hogan told the Journal that e-GM has had some successes, including expanding and improving GM's Web sites for customers around the world.

But he said in the report that GM is scrapping plans for a major joint venture with its U.S. dealers that would woo customers who now go to third-party Web sites for information, instead of GM's own. In addition, GM no longer is considering buying a stake in a third-party provider, but will likely continue working with partner Autobytel to test systems to link customers to dealers, Hogan said.

Another big initiative under e-GM, GM's OnStar in-car communications unit, operates largely independently, Hogan said. GM expects OnStar to begin generating profit sometime in 2003.

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