General Motors in £1.3bn EDS outsourcing renewal

General Motors has renewed an outsourcing contract with HP Enterprise Services, formerly EDS, signing a deal worth $2 billion (£1.3 billion).

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General Motors has renewed an outsourcing contract with HP Enterprise Services, formerly EDS, signing a deal worth $2 billion (£1.3 billion).

EDS was acquired by General Motors in 1984, but was spun off 12 years later and has continued to provide IT for the car manufacturer since. EDS was then bought by HP in 2008.

The deal marks a major renewal at a time when budgets are tight and many end-user companies are delaying signing off agreements.

Under the multi-year contract, HP will provide network, workplace, mainframe management, application and systems integration services for General Motors globally. The work will apply to all of the company’s locations, from car manufacturing plants to offices, covering PCs and mobile devices for many of the company’s 200,000 employees.

Terry Kline, chief information officer at General Motors, said the company needed “collaborative, cost-effective approaches” to technology, and to be able to create and launch new services quickly. It also procures IT services from IBM, Wipro and Capgemini.

HP said it will continue to work on a converged infrastructure and overall technology plan for the company, supporting a “multi-supplier” environment.

Application development and management services from HP will cover product manufacturing and development, business services and the supply chain. General Motors’ finance and supply chain functions will be supported by the supplier’s mainframe management services.

There will also be remote network management for data, network security and videoconferencing services. An HP service desk will support General Motors sites in over 50 countries and languages.

Tom Iannotti, general manager at HP Enterprise Services, said the car industry was “in the midst of a transformation” and vowed that HP would help make sure General Motors’ technology is “hitting on all cylinders”. HP will subcontract work to Microsoft and PricewaterhouseCoopers.

In January, HP Enterprise Services faced a large UK strike over job cuts and pay freezes, which targeted work at General Motors as well as government contracts. The company said at the time that it took steps to mitigate the effect of the strike, by reducing non-urgent project work and prioritising “critical work”. Two weeks ago, it emerged that HP had told staff it will cut 934 more jobs in the UK by November, on top of the 4,000 over the past two years since the acquisition of EDS.

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