GM Preferred Provider

[Gerry Laughlin]

Matt,
I read last night that GM and R&R have broken off negotiations on R&R being named a prefered provider. We are currently looking at the EDS system as a replacement to ADP, but our major reason for hesitation was R&R and GM's potential aggreement. Do you see yesterdays announcement affecting EDS's and GM's relationship in a positive or negative way? I guess I am looking for you to look into your crystal ball.
Thanks,
Gerry

[Matt Parsons]

Gerry, we view this as a positive sign for all approved DSP providers for GM. The original announcement by R+R and GM had been very confusing to us and everyone within the industry that we talked with. The item that was the most confusing was that no one appeared to be in a position to supply the criteria that was used to evaluate R+R's offerings that led them to be named as the preferred provider.

As you may be aware, EDS was owned by GM for a number of years, and during that period our solutions were never positioned as the preferred DMS - thus the quick move to naming R+R as that when these discussions began certainly caught us off-guard.

Ultimately, I believe that there are numerous strong solutions in the market for dealers in the area of DMS. The key is to identify a company that can effectively deliver on a sustained basis, is visionary in their approach to providing soluions to dealers, and that ultimately you are comfortable forming a long-term relationship with (becuase once you select a partner, it is highly unlikely you will change providers for at least the next 3-5 years - according to industry statistics).

As a final note, EDS and GM continue to maintain a very strong working relationship at all levels of our companies, and we continue to sign new business with GM across all sectors, as exhibited by our recent press announcement of EDS supplying web hosting to GM.

Matt

P.S., I am at the COMDEX convention participating in EDS' support of this massive convention. For more info aout EDS. COMDEX, and our role in the Digital Economy, please go to eds.com.

Also, I would higly suggest that if any dealer has questions relating to Dealer Systems Providers in support of GM, that you should feel free to contact the Chairman of GM's IT Dealer Council - Spencer Hondros, Villa Marin Pontiac, Buick, GMC, Staten Island, NY. Spencer is involved with the dealings of all approved providers and can share insight into what he and his council know about each provider, their direction, etc.

[This message has been edited by Matt Parsons (edited 11-16-2000).]