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Could High Tech Save Detroit?

The grim layoff news expected from Detroit this week is a clear indication of just how difficult the recession has made things for the automakers. But if job cuts aren't enough, perhaps high tech could help boost sales and improve the Motor City's bottom line.

Certainly Microsoft is making a play in that direction, teaming with Accenture to deliver advanced automotive telematics (in-car communications) solutions, including wireless Internet connections, to the industry.

It has not been a happy year for most of the auto companies. Both GM and Ford are reportedly preparing to announce job cuts at the conclusion of the industry preview at North America's largest auto show in Detroit this week. GM has said it was aiming to cut its North American white-collar headcount by about 5,670 jobs, or about 10 percent, this year. There is talk of 10,000 jobs or more being axed at Ford.

And DaimlerChrysler has said its Chrysler Group will struggle to break even in 2002 amid a slump in truck sales and higher marketing costs. Chrysler is in the second year of a three-year restructuring in which it plans to slash 20 percent of its U.S. workforce and idle six plants.

Technology believers Microsoft and Accenture (formerly Andersen Consulting) used the Detroit show to talk about how they are collaborating to offer automakers, suppliers and telematics service providers a seamless integration process for in-vehicle consumer services through the newly formed Accenture Services Bureau for Automotive Telematics and Microsoft Car .NET architecture, services and products, including Windows CE for Automotive.

CE for Automotive is a real-time embedded operating system that enables new categories of in-car computers designed to provide hands-free communication, access to personalized information on the Internet and other convenience and entertainment applications.

Accenture and Microsoft said they will offer a range of services aimed at helping the automotive industry integrate business partnerships and technologies by tapping into their own network of businesses, including MSN services and content.

UBS Warburg Ltd.'s Telematics Research has predicted that by 2006, nearly 33 percent of all automobiles sold will include a telematics system.

"Automotive telematics offers manufacturers and suppliers opportunities to provide consumers with ... new products and services," said Umar Riaz, partner with the Automotive Industry Group at Accenture. "More importantly, the industry will be able to recognize new revenue streams, cost efficiencies and unprecedented brand differentiation. Our solution will help automakers transform customer relationships, allowing more focus on their core production and business activities."

Accenture and Microsoft said they are providing a global business strategy and infrastructure that:

  • Uses scaleable, flexible information technology and Microsoft-based platforms to design, build and run applications via a mobile network
  • Creates an infrastructure to link in-vehicle devices and software applications to the Internet and wireless communication networks
  • Provides operations and support services such as billing, application hosting, customer care and technology support as well as consumer services, including Internet content, navigation, location-based services, and safety and security enabled by Microsoft Windows CE for Automotive
  • Delivers services, including consulting on business strategy, system design and integration, and solutions outsourcing.

Meanwhile, General Electric, through its Transport International Pool (TIP), a GE Capital company, acquired an additional 5 percent stake in TruckersB2B through a share purchase deal with Comdata Corp., a subsidiary of Ceridian Inc. Financial terms were not disclosed.

TruckersB2B, majority-owned by Celadon Group, is a provider of pre-negotiated savings on fuel, tires, equipment and other products and services purchased by small and medium-sized trucking companies and private fleets.

Devon, Pa.-based Transport International Pool is an over-the-road trailer and intermodal equipment transportation services company in the trailer renting, selling and leasing business.