Many questions remain unanswered about NewCo, the singular business-to-business Internet marketplace being launched byCorp., Motor Co. and DaimlerChrysler AG.
But executives of the three automakers are emphatic in discouraging suppliers from setting up their own exchanges, which ultimately could compete with NewCo.
At an e-commerce conference last week in Dearborn, MI, Peter Weiss of DaimlerChrysler Corp. says the automakers are creating NewCo because several Tier 1 suppliers wanted a single communications standard.
“They said to us, ‘Don't create another standard out there.’and asked us for one standard,” says Mr. Weiss, program director of e-Extended Enterprise. “We offer one portal for the entire supply community to use.”
He agrees with his GM counterpart, purchasing chief Harold Kutner, who told journalists recently that it would be “really disappointing” and a “major mistake” for suppliers to create their own exchanges because it will be counterproductive. “They will just add cost to their own business processes,” Mr. Kutner says. He says the three automakers overcame competitive issues because they see the wisdom of creating one exchange.
Motor Co. Ltd. and partner SA will join NewCo, but AG has said it will start up its own exchange. Mr. Weiss says the NewCo exchange could “absolutely” include a link to the Volkswagen site.
, and four other Tier 1 suppliers are jointly “studying” the NewCo model. “There's been some perception that this is a supplier-against-OE initiative, and it definitely is not,” says Bill Carroll, president of Dana's Automotive Systems Group.
But the study could lead to creation of a separate supplier exchange, he admits. “It could be an exchange for suppliers but not at the detriment of the Big Three,” Mr. Carroll says. “Whatever we do collectively or individually will be transparent and connect to NewCo as we know it today.”
Some supplier executives see comments such as Mr. Kutner's as a thinly veiled attempt to monopolize the process and perhaps cash in on transaction fees, which is one of the reasons the Federal Trade Commission is taking a keen interest in NewCo.
A permanent name for NewCo is expected within a month, and FTC approval could come in August or September, Mr. Weiss says. An initial public offering could come at the end of this year or early next year.
Supplier representatives will sit on the board that oversees NewCo, but it is unclear whether suppliers will be granted an equity stake.