GM yet to do majority of y2k workgreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
Check my math on this one to see if I'm figuring this right.
First, text of Reuters story:
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.
OK, if we ignore the value of EDS services, GM projects that total y2k "direct spending" will be $450 million to $520 million.
They also say they spent $40m in '97, and $145m in '98 (total = $185m).
Based on their direct spending projections, they have somewhere between $265m and $335m left to go.
If we assume a somewhat direct correlation between dollars spent and work completed (don't assume this when it comes to government projects!), it would seem that GM must cram between 59 and 64 percent of the job into 1999.
Am I running the numbers correctly here? Do they really have the majority of the work ahead of them? God, I hope not, for the sake of the economy and those 100,000 suppliers and vendors GM has.
-- rick blaine (firstname.lastname@example.org), March 12, 1999
Good. I hope they go bankrupt. I hate stinking cars.
-- @ (@@@.@), March 12, 1999.
I noticed that too in an earlier thread. I'm sure someone far brighter than us though shall be able to explain it all away.
There is a bright side though. GM are telling us that after reviewing all microprocessors installed in cars and trucks over the last 15 years none will be affected by any problems.
Hmmm! I don't recall them reviewing the microprocessors in our two GM vehicles. Does each chip have to be tested or not?
-- Motoring (email@example.com), March 12, 1999.
-- Puttering (firstname.lastname@example.org), March 12, 1999.
Well, look at the bright side...at least they won't be paying that $75 million bonus to EDS.
-- a (email@example.com), March 12, 1999.
"If we assume a somewhat direct correlation between dollars spent and work completed (don't assume this when it comes to government projects!), it would seem that GM must cram between 59 and 64 percent of the job into 1999. "
One cannot make this correlation. Testing, testing, testing and then end-to-end testing makes up a significant part of any Y2K budget - and it is the last thing done. (before the contingency planning of course...)
-- Vinnie (firstname.lastname@example.org), March 12, 1999.
Testing, testing, testing, and end-to-end testing is going on is it?
-- That's (email@example.com), March 12, 1999.
Compare what GM is saying now with these two quotes from an April 23, 1998 article on the auto industry:
GM expects to spend $360 million to $500 million, most of it this year, to prepare its factories and offices for 2000. The largest automaker spent $44 million on Year 2000 issues in 1997.
But the Big Three are confident they will enter the new millennium smoothly. GM, Ford and Chrysler plan to finish debugging by the end of 1998. They'll spend 1999 fine tuning.
-- Kevin (firstname.lastname@example.org), March 12, 1999.
What was that quote again---"When Detroit catches a cold, the U.S. catches pneumonia?" Hope to heaven they make it.
-- FM (email@example.com), March 12, 1999.
Bad rebuttal Vinnie, you're correct that testing usually comes last in y2k projects. The problem is, testing is THE most time consuming portion of the project. If they've been remediating code for 2 years and are just now starting testing, what conclusion should we come to.
-- RB (R@AR.COM), March 12, 1999.
That's one type of pneumonia this country desperately needs. It's about time we get rid of the poison-spewing life-killing death traps.
-- @ (@@@.@), March 13, 1999.