GM Wireless

Case From Chapter 4

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Company Background
„ General Motors Corp. (NYSE:
GM), the world's largest
vehicle manufacturer,
employs about 325,000
people globally. Founded in
1908, GM has been the
global automotive sales
leader since 1931. GM today
has manufacturing
operations in 32 countries
and its vehicles are sold in
192 countries. In 2003, GM
sold nearly 8.6 million cars
and trucks, about 15 percent
of the global vehicle market.
GM's global headquarters are
at the GM Renaissance
Center in Detroit. 3
 Products and
Services
„ Chevy „ Hummer
„ Pontiac „ SAAB
„ Oldsmobil „ OPEL
e „ Financial
„ Cadillac Services
„ Buick „ DirectTV
„ GMC „ DirectPC
„ Saturn „ XM Satellite
Radio

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 Administration

CEO – G. Richard Wagoner, Jr.

5
 How was it done?

„ A 30-person task force

drawn from different
organizational divisions but
headed by CIO. the task
force worked for 60 days.
„ Tens of millions of dollars -
Nothing is small at GM! GM
is reported to have
invested 1.7 billion on
Internet applications
during the past five years.

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 Market Share

35.00%
30.00%
25.00%
20.00% Cars
15.00% Trucks
10.00%
5.00%
0.00%
1996 1997 1998 1999 2000 2001 2002

GM Market Share
(Domestic)

1996 1997 1998 1999 2000 2001 2002

Cars 32.70% 32.40% 30.00% 29.80% 28.60% 26.90% 25.40%

Trucks 29.00% 28.80% 27.60% 27.80% 27.00% 29.20% 31.00%

 Sales

200,000
150,000
100,000
50,000
0
1997 1998 1999 2000 2001 2002

GM Sales (Source from GM.com; Sales and

Deliveries Production)
Rate
2002 2003 Change

Car Total 2,069,206 1,960,682 -5.24%

Truck
Total 2,789,500 2,795,721 0.22%
Vehicle
Total 4,858,706 4,756,403 -2.11%
 Net Income (in billions)

$7,000
$6,000
$5,000
$4,000
Net Income
$3,000
$2,000
$1,000
$0
1997 1998 1999 2000 2001 2002

GM Net Sales & Net

Income

1997 1998 1999 2000 2001 2002

Net Sales $172,580 $155,445 $176,558 $184,632 $177,260 $186,763 (billion)

NetIncome $6,002 $2,956 $6,002 $4,452 $601 $1,736 (billion)

 Wireless Networking
„ Wireless networking refers to
technology that enables two
or more computers to
communicate without
network cabling.
„ Wireless networks are
growing in popularity due to
the emergence of cross-
vendor industry standards
such as 802.11b.

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 Wireless Networking
Continued
„ GM has had a
wireless
network for
years but it
consisted of a
proprietary
network of
mixed devices
that could not
always
interoperate.
„ A typical
wireless
network
consists of a
router, firewall,
and multiple 11

access points.
 Wireless Networking (Cont.)
„ GM has installed access points
throughout its facilities allowing for
communicating between inventory
systems, production systems, workers,
and even fork-lift drivers.
„ Access Points typically have an indoor
range of 150-300 feet depending on the
operating conditions.
„ GM’s 802.11b access points, consisting
mostly of Cisco Aironet devices,
communicate at a speed of 11 Mbps
whenever possible. If signal strength or
interference is disrupting data the
devices will drop back to lower speeds.
Though it may occasionally slow down,
this keeps the network stable and very
reliable.
„ Future Implications Æ GM is dabbling in
a wide range of wireless projects. In
offices in China, it has deployed
wireless LANs and uses wireless voice
over Internet protocol (VoIP) phones to
cut costs. Its factory floors and some of
its logistics operations use radio
frequency identification (RFID) systems
to track the movement of pallets and
12

bins.
 Wireless Lan Benefits
„ Access to twenty-four hour
corporate data from anywhere
within the plant gives business
mangers the ability to make faster
decisions
„ Sales personnel can incorporate
new information to customers
which adds value to the customer
and the organization
„ Communication quality is
enhanced with employees that
can relay information anywhere
and everywhere – wireless lans
complement traditional wired
lans.
„ Employee satisfaction is improved
with flexibility to wireless abilities
which lowers employee turnover
„ Work teams can create temporary
peer to peer networks for high
collaboration and document 13

sharing
 Additional Benefits
„ Wireless networks are easy to set
up providing benefits in areas
whereas wiring is difficult to
deploy.
„ Suitable for highly mobile
workforces that require roaming
access to network resources such
as warehouse employees in GM
factories.
„ Wireless networks offer high
performance and bandwidth to
keep all your applications and
transactions running.
„ Wireless networks are quickly
installed, provide flexibility, and
are easily reconfigured.
„ Very low incremental cost is
required to add users to an
existing WLAN network.
„ ROI on the wireless project is
expected to be less than one 14

year.
 Disadvantages of
Wireless LAN
„ Wireless adapters are more
expensive than Ethernet
adapters.
„ Wi-Fi can be difficult to set up
initially. Trying to find the optimal
location, setting configuration
options, choices of devices, and
encryption/security.
„ Speed can fluctuate significantly.
Slower than wired network.
„ Using radio waves for data
transmission might interfere with
other high-tech equipment
„ Proprietary solutions: slow
standardization procedures lead
to many proprietary solutions
only working in an homogeneous
environment
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 3 main security
issues:
„ 1: Incorrect or poor
configuration. A lot of
routers and access points
come with a default
password that is not
changed allowing
unauthorized access.
„ 2: Wireless encryption
protocol standards are
undergoing constant change
and are subject to attacks.
„ 3: Trojan software.
Execution of programs,
generally distributed by
email that appears to be a
useful or humorous file but is
in fact a virus. 16
 Authorization/Privacy
„ Networked computers should be
maintained by a network administrator
to prevent ordinary users from
changing the system in ways that
might leave the computers open to an
attack. The problem of authorization
can already be seen by a number of
companies that have installed wireless
systems in their companies but left
them open due to practices by
uneducated users.

„ Due to the nature of wireless

networking it is very easy for other
people to access the flow of
information along the network. Some
current wireless network
implementations, like 802.11b include
a form of encryption called Wireless
Encryption Protocol but this has been
shown to be insecure. Current VPN
(virtual private network) technologies
like IPSec could be used to encrypt 17
traffic between hosts on the network.
Key Competitors
(ranked by sales)

1. General Motors
2. Ford
3. Daimler-Chrysler
4. Toyota
5. Volkswagen
6. Nissan
7. Honda

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Fortune 500 Rankings
Largest U.S. Companies
#2 - General Motors
#4 - Ford

Profits
#46 - General Motors
#458 - Ford

Market Value
#85 - General Motors
#126 -Ford

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 GM’s Competitors’
Network Systems
„ Ford Motor Company uses wireless
technology along its assembly line and for
its forklift drivers, especially in its
Kentucky plant. Ford opted for wireless
technology and it has paid huge dividends.
Average forklift mileage has been reduced
by more than 10 percent. Some drivers
report cutting their mileage by almost one
half.
„ Nissan not only uses wireless technology in
manufacturing but it has wireless access
installed at Infinity dealerships that
salespersons can use to access Nissan's
customer resource management
information directly from the show floor
over two-way pagers.
„ Daimler, prior to 2001, used a paper
docket and barcode scanning system to
maintain a central record of the
whereabouts of vehicles and drivers
throughout their plants. Daimler had such
complex plants that wiring them would be
nearly impossible and very expensive.
Avaya was contracted to install wireless 20
capability for Daimler in late 2001.
Question

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