GM says Y2K will cost $710-780 million : LUSENET : TimeBomb 2000 (Y2000) : One Thread

This is an article on GM's latest SEC filing:

-- Kevin (, March 11, 1999


GM Forecasts Year 2000 Costs At $710 Million-$780 Million

(Last updated 12:40 PM ET March 11)

DETROIT (Reuters) - General Motors Corp. said Thursday that total spending to prepare the company's computer systems for the year 2000 is forecast at between $710 million and $780 million. The world's largest automaker said in a filing with the U.S. Securities and Exchange Commission that direct spending will account for about $450 million to $520 million, with peak spending occurring in the fourth quarter of 1998 and early this year. The rest of the total spending is accounted for by the value of services performed by former GM unit EDS Corp. .

The total includes an additional payment of $75 million to be made to EDS at the end of the first quarter in 2000 if systems prepared by EDS do not seriously disrupt GM's operations. Including the bonus, EDS would receive a total of about $335 million, GM said.

The automaker said it incurred about $40 million in Y2K expenses during 1997 and another $145 million last year. It valued the services provided by EDS in those years at about $260 million.

GM said its costs do not include information technology projects accelerated because of Y2K. Those projects were valued at $30 million.

The company said it reviewed all microprocessors installed in cars and trucks it assembles over the last 15 years and none will be affected by any problems. ---------------------------------------------------------------------

-- Kevin (, March 11, 1999.

Compare what's happening with GM now with this auto industry article on Y2K from early 1998:

-- Kevin (, March 11, 1999.

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