General Motors to award $15bn in IT outsourcing contracts

General Motors is signing deals to outsource up to $15bn (£8.8bn) of IT work, as it reduces its reliance on outsourcer EDS.

General Motors is signing deals to outsource up to $15bn (£8.8bn) of IT work, as it reduces its reliance on outsourcer EDS.

The outsourcing deals form part of the struggling car giant’s attempts to cut costs and restructure it business.

Around $7.5bn of the $15bn in contracts has just been awarded. Five-year deals have been given to IBM, EDS, Hewlett-Packard, Cap Gemini, Compuware’s Covisint unit, and India's Wipro.

An existing ten-year IT outsourcing deal with EDS expires this year, and this is why GM is acting now to redistribute the work.

EDS, which used to be owned by GM, will have much less business as a result. Its new contract is worth $3.8bn.

Hewlett-Packard and Cap Gemini already worked for GM, and they will have more business as a result of the new deals. HP’s contract is worth around $700m.

The outsourcing work includes computing operations and software application support, covering areas such as automotive product development, manufacturing, the supply chain, and financial services.

GM is expected to award telecoms contracts later in the year. The company lost $8.6bn last year.

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