Big Three Auto Manufacturers To Combine On New B-To-B Exchange

The world's three largest auto manufacturers today agreed to cease development of their separate business-to-business e-commerce exchanges and form an independent company that will provide a single e-business marketplace for the auto industry.

Ford Motor, General Motors and DaimlerChrysler announced plans to form an as-yet-unnamed e-commerce company in which all three will hold an equal equity stake. The three auto giants said they will invite other major manufacturers to participate on an equity basis as well.

"We believe this will be the largest b-to-b exchange in the world," said Brian Kelley, vice president and head of the e-commerce unit at Ford. The exchange will provide capabilities for e-procurement, forecasting, and online development collaboration, financial services, payment and logistics, the partners said.

The announcement will put an end to confusion among auto parts and materials suppliers, which were already being drawn in different directions by Ford's AutoXchange, which is based on Oracle Applications technology, and GM's TradeXchange, which is based on CommerceOne's MarketSite. DaimlerChrysler was developing its own exchange, but the marketplace had not begun operation yet.

"Our suppliers were asking, 'what the heck are you doing? You're going to make us support three standards?' They did not want to operate four or five different standards and exchanges," said Peter Weiss, vice president at DaimlerChrysler.

At the request of Ford and GM, Oracle and CommerceOne are building a framework that will link their respective e-commerce technologies so that they can work together in a single exchange.

"We haven't worked out the actual integration yet, but the framework is in place and it will work for any exchange around the world," said Bob Kimmitt, chief operating officer at CommerceOne.