Move Demonstrates Use of New Economy Tools to Accelerate Cost Savings
Delphi Automotive Systems (NYSE: Dph) announced today that it has signed a letter of intent to join Covisint, the global Internet exchange being formed by General Motors, Ford, DaimlerChrysler, Renault and Nissan. Richard L. Radecki, corporate director of the Delphi e-business program office, made the announcement.
According to Radecki, Delphi plans to use Covisint as the primary exchange for conducting electronic transactions with customers and suppliers. Delphi is the world’s largest automotive supplier with revenues exceeding $29 billion in 1999. Delphi purchased more than $15 billion of goods and services last year.
“Delphi is a strong proponent of common standards and infrastructure to reduce potential system redundancies. We believe Covisint addresses this issue and through our participation we expect to continue to accelerate our revenue growth, supply chain cost reduction and enhanced communications. Additionally, we believe Covisint will move the industry forward with solutions in collaborative engineering and global supply chain management,” Radecki said.
He added that the move to join Covisint builds on a foundation of experience in e-business and online procurement that yielded Delphi more than $70 million in identified savings last year. And, Delphi executives expect Covisint to propel savings beyond this level.
“Of course, we will continue to respond to the requirements of all of our customers irrespective of their choice for Internet exchange services,” Radecki added.
According to executives at Covisint, having the largest automotive supplier join the exchange validates the direction of the venture and highlights the potential benefits to the entire automotive industry. Customer input is critical during the development phase and active participation from Delphi and other major partners will help ensure its success.
“As a key tier one supplier, having a voice in this process will enhance the value not only for us, but for our OEM customers and the supply base,” Radecki said.
Officially named Covisint last month, the new venture will be established as an independent company and will offer products and services designed to help auto makers and suppliers achieve efficiencies throughout the supply chain. Currently, Commerce One and Oracle are the two primary technology providers to the planned venture. Covisint will integrate best-of-breed technologies to provide solutions for its customers.
Multi-national Delphi Automotive Systems, with headquarters in Troy, Mich., USA, Paris, Tokyo and Sao Paulo, Brazil, is a world leader in transportation and mobile electronics components and systems technology. Delphi’s three business sectors — Dynamics & Propulsion; Safety, Thermal & Electrical Architecture; and Electronics & Mobile Communication — provide comprehensive product solutions to complex customer needs. Delphi has approximately 213,000 employees and operates 176 wholly owned manufacturing sites, 41 joint ventures, 53 customer centers and sales offices and 30 technical centers in 38 countries. Delphi can be found on the Internet at www.delphiauto.com .