An
initial public offering (IPO) of Covisint LLC, the auto industry’s big Internet
marketplace, is ‘unlikely’ this year according to comments made by Brian Kelley
to Dow Jones.
Ford vice president and Covisint board member Brian Kelley told Dow Jones that
an IPO will depend on an improvement to stock market conditions, as well as
Covisint’s performance.
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"The reason for doing Covisint was not for an IPO," said Kelley,
Ford’s VP for global consumer services. "We are taking a long view of Covisint."
Covisint "will succeed," Mr. Kelley insisted, but it will take longer
than six to 12 months to build. "Covisint wouldn’t be ready" for an
IPO this year, he said. In addition, market conditions would have to be right
for an offering.
Covisint
was set up in February 2000 by Ford Motor Co., General Motors Corp. and DaimlerChrysler
AG with the aim of helping auto makers cut millions in costs by collaborating
with their partners and suppliers over the Web.
But since then, the exchange has been criticised for not getting off the ground
fast enough.
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By GlobalDataA tiny fraction of the three founders’ $US740 million in combined annual spending
has been put through the exchange and critics say it will be a long time before
any of the million-dollar plus savings are actually realised.
Nevertheless, Covisint continues to take the highest profile role in the automotive
exchange area and its position as the dominant online trade exchange has been
strengthened as other potential rivals – most notably the so-called S8
group of tier 1 suppliers – have concluded talks without any formal exchange
structure being agreed.
After a protracted search, the company has now appointed Kevin English of CSFB
as its CEO. He has said that he will make customers, and building customer loyalty,
his first priority.
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