GM plans to hire 3,000 HP employees for insourcing

GM plans to hire 3,000 HP employees for insourcing
Nick Bunkley — Follow Nick on
Automotive News | October 18, 2012 – 12:30 pm EST
UPDATED: 10/18/12 12:58 pm ET – adds details

DETROIT — General Motors said it will hire 3,000 Hewlett-Packard Co. employees as part of its ongoing effort to bring most information-technology work back in-house.

The hiring will be part of a new multiyear software and services agreement between the two companies. In a statement today, GM described the deal as “cost-neutral,” but it did not provide any additional details on the size or length of the contract or where the workers will be located.

The employees being hired already work on GM’s business at HP and are expected to be on GM’s payroll within six months. An undisclosed number of HP employees currently assigned to GM are not affected, the companies said.

“These agreements with HP will enable us to accelerate the progress of our IT transformation by delivering increased innovation and speed of delivery to our GM business partners, and reduce the cost of ongoing IT operations,” Randy Mott, GM’s chief information officer, said in the statement.

“Transforming our internal IT operations will give us the resources, tools and flexibility we need to provide better services and products to our global GM customers.”

Mott said GM expects to save money by using the HP software to automate some tasks, then reinvest the savings in ways that promote more innovation. He said GM will be able to overhaul its IT operations more quickly by having the workers become direct employees.

“Their jobs will be changing pretty rapidly over the course of the transformation,” Mott said on a conference call Thursday afternoon. “We felt it was important they be very well integrated into the GM team.”

Previous plans

GM has previously said it intends to hire as many as 10,000 workers as it transforms its IT operations and opens “innovation centers” in Texas, suburban Detroit and two other locations not yet announced. The automaker believes it can improve efficiency and become more innovative by reducing the amount of IT work handled by outside vendors from 90 percent to 10 percent within five years.

GM has an estimated annual IT budget of $3 billion.

GM hired Mott in February from HP to execute the in-sourcing plan. The two companies have worked together for about two decades.

George Kadifa, executive vice president of HP Software, said the deal represents the “most comprehensive deployment of HP software in the world.”

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