GM PLANS $258M DATA NERVE CENTER IN MILFORD
‘CORE COMPETENCY IN IT’
By Nathan Bomey Detroit Free Press Business Writer
A massive network of servers generates a low humming sound, and you can feel the floor buzzing. A glance through the floor’s glass pane reveals thick clusters of cords directing countless terrabytes of digital information throughout the world.
The scene may not stir the heart like a new Chevrolet Corvette or Cadillac ATS, but this is the new data center at General Motors’ Technical Center in Warren — a hub of GM’s global information technology transformation . The automaker is investing $546 million to establish this facility and $258 million to build a second data center in Milford, as Chief Information Officer Randy Mott brings 90% of GM’s information technology work back in house after decades of relying on outside vendors.
Construction in Milford will start this summer. That center is expected to open in July 2014.
As many as 350 construction workers are expected to help build the center, including 95% from southeast or central Michigan, GM said. The center in Warren opened in January, with the first one of four 10,000-squarefoot sections already full of servers. The second section is expected to open in July. The other two will open within the next few years.
CEO Dan Akerson said he was shocked to find that GM was outsourcing 85% of its IT work, compared with the industry average of 25% to 35%.
“There isn’t a company on a global competitive basis that isn’t good at IT, that doesn’t control their destiny by virtue of better information in every aspect of their business,” he said.
“Today, every single link of the automotive value chain is wired and connected from design to the showroom floor,” Akerson said in a news conference. “That’s why for any company, not just an automotive manufacturer, to be successful in the 21st Century you have to have a core competency in IT.”
GM is hiring about 9,000 employees throughout the world over several years, including about 5,000 former Hewlett-Packard employees who were previously doing GM’s IT under contract. GM is opening software centers near Atlanta, Phoenix, Austin, Texas, and Warren.
So far, Mott said, GM has hired about 1,800 software workers and 2,500 H-P employees. The Warren innovation center will have more than 1,500 employees, and a majority of the H-P employees are in Michigan, Mott said.
Akerson has said GM paid a 30% premium for the H-P workers with most of the providers former GM employees from the period in the early 1980s when GM owned Electronic Data Systems.
The overhaul is meant to expedite development of future vehicles, saving costs and improving communication.
For example, GM said the new systems would allow vehicle safety teams to crunch data quickly through digital crash-test analysis, saving $350,000 for every actual crash test that doesn’t have to be conducted.
“That’s a much different perspective, a much different orientation than we’ve had in the past,” Akerson said. “We need that to transform the way we design, build and sell the world’s best vehicles.”
The command center in Warren has 48 computer stations and 28 video screens. Employees staff it 24 hours a day, 365 days a year, allowing GM to respond to disruptions at manufacturing plants, engineering sites and sales operations.
About 35% of the new employees for GM’s software innovation centers are recent college grads, including students from the University of Michigan, Eastern Michigan University and Michigan State University.
The IT Operations and Command Center in the Enterprise Data Center April 24 at the General Motors Technical Center in Warren. GENERAL MOTORS
Dan Akerson, GM chairman and CEO, announces the new GM Warren Enterprise Data Center on the campus of GM Technical Center in Warren on Monday. MANDI WRIGHT/DETROIT FREE PRESS
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