IBM (NYSE: IBM) and other firms have big outsourcing contracts with GM for information technology, but the car manufacturer has decided to hire thousands and bring the work back internally.
That could mean bad news for Big Blue.
General Motors said Thursday that it plans to bring most of its information technology work in-house, Randy Mott, chief information officer, told reporters.
GM intends to have 90 percent of such work done internally, up from 10 percent currently, Mott said in Detroit.
GM also will pare its data centers to two from 23.
“If you’re more efficient and you can go through the process more quickly, you have more time and more resources to be looking at innovations that provide a competitive advantage for the company,” a GM spokesperson told Reuters.
The automaker plans to hire thousands of people as part of shifting work that has been done by contractors, Mott said. About 1,500 of more than 10,000 people working on information technology for the company are employees, he said.
Chief Executive Officer Dan Akerson wants the Detroit-based automaker to increase its operating margins after a record annual profit of $9.19 billion last year.
Reuters noted that in July 2010, France’s Capgemini announced two five-year deals with GM worth about $250 million.
Other IT service providers for GM include IBM and India’s Wipro.
IBM employs some 10,000 people across North Carolina.
[IBM ARCHIVE: Check out a decade of IBM stories as reported in WRAL Tech Wire.]
(Bloomberg contributed to this report.)