AT&T Scores GM, Delphi Outsourcing Deals
AT&T today scored major global IP network design, building, and management contracts with General Motors Corp. and Delphi Automotive Systems totaling more than $500 million during the next five years.
GM signed a $350 million contract with AT&T Solutions, the company's professional-services subsidiary, that includes replacing within the next year the auto manufacturer's existing networks with a Cisco Systems router-based IP backbone network. AT&T Solutions plans to work closely with EDS, GM's current primary network and computer services provider, to ensure a smooth transition to the IP network, which will provide connectivity among GM's 1,100 locations in more than 40 countries.
While EDS did not directly bid on the IP network contract, the services firm will continue to provide 75% of GM's IT services into 2006, says Bob Chaffin, director of finance and contract management with GM's Information Systems and Services group. GM says it cannot quantify how much money the deal with AT&T will save the company over time, but Chaffin did point out that GM's relationship with AT&T is part of an overall GM initiative to reduce its IT costs by $100 million.
GM's goal is to have a single IP network that connects the company globally within the next two years, says Rick Roscitt, president and CEO of AT&T Solutions. Until that time, AT&T will maintain separate voice and data networks on a single backbone for GM.
AT&T Solutions' $160 million deal with Delphi calls for the services firm to likewise design, build, and operate a global IP network, allowing Delphi to link its global locations with more than 2,800 suppliers and customers in a unified virtual private network. Part of GM before establishing itself as an independent, public company in May, Delphi operates 168 wholly owned manufacturing sites, 38 joint ventures, 51 customer centers and sales offices, and 27 technical centers on six continents.
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