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HP-EDS combo makes General Motors 'uncomfortable'

Too much in one bucket?

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HP commands one third of General Motors' $15bn annual technology budget, following its takeover of EDS. And GM doesn't like it.

Ralph Szygenda, chief information officer at GM, told Bloomberg that the takeover made his company "somewhat uncomfortable. The question is, do I have too much in one bucket? Down deep, economics tells me I need some more diversity."

He also told the newswire that the company had saved $12bn over the last ten years by putting technology contracts out to competitive tender. But Szygenda has no immediate plans to look for new suppliers. This is probably wise, as GM is enmeshed with EDS, a company it used to own. Still, the heat is on HP from a major customer, which has lost almost as much money in recent years - $70bn since 2004 - as Iceland has in recent days.

HP is on message: "We understand GM's concerns and are committed to working with them to address those concerns," says Jeff Kelly, who runs EDS in the "United States, Canada, General Motors and Latin America".

IBM could no doubt, issue an identical statement. ®

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