Two rail cars with an ad for the 2014 Chevy Silverado pickup truck pass General Motors’ world headquarters in Detroit. The company, which had outsourced all its IT work, is bringing it all back in-house.REBECCA COOK/Reuters
General Motors Co. will open a fourth U.S. information technology centre as part of its plan to bring that work in-house and improve the automaker's efficiency and productivity.
GM said on Wednesday it would hire 1,000 people, including software developers, database experts and business analysts, to staff the centre near Phoenix, Ariz. It will be the last of the four centres in the United States that GM previously said it would open.
Last summer, GM, a pioneer in outsourcing information technology, said it would reverse that trend with plans to expand vastly the number of in-house IT experts over three years.
At the time of the announcement, GM outsourced some 90 per cent of its IT services and provided 10 per cent of that work in-house, an approach that had been the model at the Detroit company for most of the last three decades. The U.S. auto maker said it planned to flip those percentages.
"We're actually ahead on the (IT) innovation centres," GM chief information officer Randy Mott said on a conference call. "It doesn't mean that we don't still have a long way to go because we do, but these are kind of the key ingredients to allow us to do that."
In January, GM said it would open a third centre near Atlanta, joining Austin, Tex., and Warren, Mich., as part of the company's strategy.
Mr. Mott said the company chose the locations based on the availability of talent, a lower cost of living and a high-tech industry presence. He said GM would not be hampered by not opening a location in Silicon Valley, Calif.
"There's not a lock on innovation there," he said of Silicon Valley. "It just happens to be a collection point. There are high-innovation centres outside of there."
Mr. Mott, a former Hewlett-Packard Co. executive, outlined his plans last June to GM's IT employees, which then numbered about 1,500. GM currently employs almost 5,500 people on its IT staff and that number will rise to about 9,000 when the transition is complete, Mr. Mott said on Wednesday.
GM, which has not disclosed the cost or savings of its strategy, is targeting 30 per cent to 35 per cent of the hires to be recent college graduates, who add a high level of energy, he said.
Last October, GM said it would shift 3,000 people over six months to its payroll from HP, which has long handled IT work for the auto maker. Mr. Mott said most have joined GM and the rest of the shift will be completed by April 1.
In the two months prior to that, GM had announced plans to hire 2,000 workers to staff new IT centres in Texas and Michigan. The Arizona centre will be located in the Phoenix suburb of Chandler.
Effective April 1, Mr. Mott said GM will open a temporary centre in Arizona and begin hiring. The new, $21-million (U.S.) centre, which GM will lease, is expected to open by the first quarter of 2014.
GM also said last summer that as part of its plan it would shift from 23 data centres worldwide to just two, both in Michigan. It opened one in Warren, and is still looking for the second location. Mr. Mott said the second location could be in Milford.