IBM, French Partner Strike Deal With Ford
DETROIT (AP) _ IBM Corp. and a French partner have struck a deal with Ford Motor Co. to help the world’s No. 2 automaker streamline the computer-aided design of vehicles _ a contract analysts say could be worth as much as $500 million.
The Armonk, N.Y.-based technology giant and Dassault Systemes will supply software and other tools that will allow Ford to link aspects of its design, development and manufacturing processes, IBM said.
IBM and Dassault, a software maker, are expected to announce the pact Thursday.
Ford spokesman Paul Wood said the agreement was worth $50 million, although analysts said the deal could be worth between $400 million and $500 million, depending on the length of the contract. IBM said the contract was for five years, although Wood disputed that length. IBM officials would not discuss financial terms.
John Moore, an analyst with ARC Advisory Group in Boston, said the new arrangement allows Ford to standardize a design process that now uses myriad incompatible hardware and software.
Ford will have the ability to link design teams worldwide, including those at its Volvo and Land Rover divisions, Moore said.
``The idea is to accelerate the time you get a product to market, and the best way to do that is to have design teams working concurrently,″ he said. ``You can’t do that if everyone is working on different programs.″
IBM/Dassault supplies similar tools to more than 20 automakers worldwide.
The companies have developed software that provides a three-dimensional vision of the entire lifecycle of products _ from conception to retirement.
Ford spokesman Said Deep said the automaker will begin using the new system in a pilot program for a future vehicle. He said integrating the system will take some time, but he couldn’t be specific.
Ed Petrozelli, IBM’s general manager for global product lifecycle management, said Ford eventually should be able to complete design aspects in one-tenth of the current time.
``It’s starting to show a real creative side as part of their revitalization,″ Petrozelli said.
Ford is 13 months into a five-year turnaround that aims at cutting costs and boosting profits by $9 billion by mid-decade.
Kevin Prouty, an analyst at AMR Research in Boston, said the Ford-IBM/Dassault partnership is likely to make competitor Electronic Data Systems Corp. a bit nervous, though EDS still handles a significant portion of Ford’s computer-aided design.
EDS, based in Plano, Texas, also has a partnership with General Motors Corp., the world’s largest automaker.
``There’s no clear-cut loser, but from a perception standpoint, if EDS had won this deal, they could say Ford and GM were their own strategic partners,″ Prouty said.