General Motors Corp. and Ford Motor Co. today revealed plans to combine their separate business-to-business exchanges to form a single integrated E-marketplace. DaimlerChrysler AG has also agreed to join the exchange, which will be open to all other automakers, suppliers, partners, and dealers.
Suppliers, many of which provide products to two or more of the Big Three, pressured the troika to create a single exchange so they wouldn't have to do business through separate GM and Ford exchanges, with the possibility of DaimlerChrysler creating a third, executives from the automakers acknowledged.
"Our suppliers wanted this to happen," says Brian Kelley, a Ford VP. "The benefits are now so strong that that we don't expect to have to sell it hard."
"We had long looked at trying to create our own exchange, but listened to our suppliers and found a reason to join in--co-opetition," says Peter Weiss, a senior executive at DaimlerChrysler.
The companies will create an independent company in which each will have equal ownership. Oracle, which built Ford's AutoXchange, said it and Commerce One Inc., which created GM's TradeXchange, have collaborated on a common architecture for the integrated marketplace, but did not provide additional details.
The trio are recruiting other automakers who would also receive a stake in the still-unnamed company. The exchange integration project is already under way and will be completed fairly quickly, a GM spokesman says.
"When it comes to the Internet, partnerships once thought to be unthinkable are not only now doable, but are expected," says Chris DeNove, director of automotive retail and distribution analysts at J.D. Power and Associates. "This development takes the power of the Internet to its extreme. The ability to bring together the three biggest domestic automakers in this program shows how the Internet provides a unified communications tool. And if the venture proves effective, I wouldn't be surprised if big outside industries are brought into [the effort]."
The integrated exchange will offer all the same services as the existing Ford and GM marketplaces--both unveiled in November. It may be expanded to encompass other unspecified industries, according to a statement by the car companies. Plans call for taking the company public at a future date.