SOUTHFIELD, MI – Covisint LCC had an attractive offer to occupy six floors in downtown Detroit’s Renaissance Center, but the automotive Internet exchange opted to spend a little more money to keep its world headquarters here in the suburbs.
The company decided this week against the Renaissance Center because it did not want to be criticized for being too closely allied withCorp., which purchased the Ren Cen in 1996 and has moved its world headquarters there.
GM helped form Covisint two years ago, along withMotor Co., DaimlerChrysler AG, Motor Co. Ltd. and Renault SA. Peugeot Citroen joined later.
A company spokesman says the Southfield move demonstrates Covisint’s “need to assert itself” as a fully independent company. Covisint’s temporary headquarters also are in Southfield.
In early 2003, the company, with approximately 300 employees, is expected to move a half-mile north to Two Towne Square, a 9-story building now under construction. Covisint will occupy the first four stories of the building, with a proviso allowing for expansion within the building, if necessary.
Keeping Covisint in metro Detroit is significant, given speculation a year ago that the company might move to California or the East Coast for easier recruiting of high-tech talent. The Covisint board decided it was more important to be close to Detroit, the North American center of the auto industry. Nearby Ann Arbor – a fertile ground for university recruiting – also was in the running.
Additionally, DaimlerChrysler has selected Covisint to develop and host the auto maker’s global portal for communicating with its suppliers. DC officials say the Covisint portal represents a single standard for communication that will save money and time by eliminating expensive Web applications that don’t interface with each other.
and Automotive Systems Corp. already use the Covisint portal. DC says its suppliers worldwide will be able to communicate and exchange data more effectively with each other through the portal.
Mark Baughman, Covisint’s global director of portal and messaging products, says suppliers to the Big Three must be familiar with up to 120 applications to interact with their OEM customers.
“Through one protocol, it’s cheaper from an administrative standpoint,” Baughman says. “Rather than having multiple doors to different customers, the portal is one door that gets you to Ford and DaimlerChrysler and.” Other auto makers and suppliers are expected to sign up for the portal during the next three months, he says.
Because of DC’s significant European presence with Mercedes-Benz, Baughman says the new contract represents the biggest non-North American use of the Covisint portal. Eventually, the Covisint portal can be used for purchasing, Baughman says.
Meanwhile, Covisint CEO Kevin English says he hopes the company will post a profit in 2002, even though the online exchange likely will see a significant loss in 2001.See related story