Electronic Data Systems has sold a business that helped run car dealers’ computers to Automatic Data Processing Inc. – a move EDS said would allow it to focus more on seeking business with manufacturers.
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According to Associated Press (AP), financial terms weren’t disclosed.
An EDS spokesman, Sean Healy, reportedly said the Automotive Retail Group had $US30 million in annual sales and employed about 300 people, mostly in Michigan and the sale to ADP’s dealer services group will cut EDS’ earnings by less than 1 cent per share.
AP said the deal came just four days after EDS, which provides technology services for other companies, announced a much larger deal, the $2.3 billion sale of its software division.
The news agency noted that EDS in trying to reverse course after suffering setbacks on several large accounts and failing to win some high-profile new contracts. The company reportedly posted a $354 million loss in the fourth quarter after writing off $559 million in deferred costs on a contract with the Navy and Marine Corps.
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By GlobalDataAP said the EDS auto-retail group provides computer help to more than 16,000 car and truck dealers in the United States, Canada and Europe and the division was formed shortly after General Motors bought EDS in 1984. It reportedly served only GM dealers until 1996, when EDS’ split from GM allowed it to pursue other car makers’ dealers.
EDS began working with Saturn in 1988 and has become Saturn’s primary provider of dealer management systems with the contract renewed in 2002, AP added.
Darl Davidson, EDS’ vice president for US manufacturing, told Associated Press the deal would let EDS focus more on “the manufacturing industry’s core outsourcing opportunities” – the company is pinning its turnaround on expanding EDS’ traditional focus on managing computer systems into running other companies’ back-office operations such as personnel and accounting.
Mike Martone, president of ADP dealer services, told AP the auto-retail group would continue to operate as a separate operating unit based in Troy, Michigan.
