Here’s Why GM is Growing Michigan Operations
General Motors (NYSE:GM) will be bringing up to 1,500 jobs back to Michigan. The company, headquartered in Detroit, is opening up an information technology innovation center in the city of Warren, where it hopes to reel in its largely outsourced IT operations.
According to Reuters, GM outsources about 90 percent of its IT services. The shift toward in-house IT comes with a 40 percent cut in applications, which includes transitioning from 23 data centers across the world, to only two in Michigan. The move is part of a strategy spearheaded by GM chief information officer Randy Mott that will make GM more efficient and productive.
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Both GM and Ford (NYSE:F) are reeling from losses in Europe, and preparing to face heightened competition in the United States from foreign auto makers. Ford recently aimed directly at Toyota’s (NYSE:T) Prius with an advertising campaign for the company’s new hybrid C-Max car.
GM took some flak recently when news surfaced that the company’s plug-in hybrid vehicle, the Chevrolet Volt, cost the company as much as $40,000 for every sale. In the face of this, the company is consolidating its hydrogen fuel cell research efforts, relocating a plant in New York to Michigan.
According to AutoWorldNews, Charlie Freese, a GM executive in charge of the fuel cell research program, said, “I believe fuel cell vehicles could be commercialized by 2015 or 2016 if the infrastructure to support the technology is sufficient, and the technology could be cost competitive by 2022.”
However, lack of sufficient infrastructure is one of the issues that afflicts the Volt. Honda (NYSE:HMC) could offer both support and competition in the space as it works on its own hydrogen fueling stations. With Ford, Toyota, and Tesla Motors (NASDAQ:TSLA) pushing aggressively into electric vehicles, and rebounding off the apparent failure of the Volt, GM may see hydrogen as a viable fuel for its next generation of cars.
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