Auto Talk: GM Rings in Era of e-Commerce

Harold Kutner was hearing bells recently, and it was music to his ears.

The General Motors Corp. group vice president is the purchasing chief for the world's largest automaker, but in January he was playing salesman and enjoying it. GM was selling several stamping presses, and it turned to Commerce One, its partner in the newly launched GM TradeXchange, for help.

Commerce One, with a Canadian auction house, conducted the sale over its password-protected portal on the Internet, and the equipment sold in minutes, without an expensive live auction that many potential buyers could not attend. More buyers meant higher prices.

Mr. Kutner invited journalists to watch the auction on a projected computer screen, as proof of the "transformation from a smokestack industry to a click-and-brick industry."

On the screen, observers saw the list of presses and the highest bid for each one. Every time a higher bid came in, a bell sounded and the new price, as well as the name of the bidder, appeared on the screen. As time was running out in each auction, there was a flurry of bidding and a steady stream of ringing bells. Every ring of the bell represented more money going to GM's bottom line.

GM sold seven stamping presses from its Indianapolis plant for a total of $1.8 million. Nearly 150 on-line bidders participated and had time beforehand to review the equipment. About 30 people generally participate in similar live auctions.

GM expects to begin buying parts from suppliers in a similar format by year's end, and all of GM's purchasing could be conducted on-line within two years, Mr. Kutner says.