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OEConnection, from Bell and Howell, DaimlerChrysler, Ford, and GM, Online Portal Opens for Business with CollisionLink Parts Locator

The company created by Bell and Howell, DaimlerChrysler, Ford, and GM has a name: OEConnection. The following series of FAQs were "located" by INSIGHT at the company's website:

What is OEConnection about?

This online portal will allow auto dealers and their wholesale parts customers (i.e. repair shops, collision shops) to identify, locate and move repair parts more efficiently. It will provide buyers a single source for all of their OEM parts and service needs through the OEM dealer channel. We expect this new portal to provide benefits to dealers and to their wholesale customers through speed and increased efficiency. By working together, DaimlerChrysler, Ford Motor Company and General Motors also bring scale that should greatly expand the usefulness of the portal to its participants. For example, a parts locator is a great tool in a dealer's parts department, but its effectiveness is directly linked to the number of other dealers also using it.

Who is involved in OEConnection?

The portal is founded by the Mopar Division of DaimlerChrysler Corporation; Ford Automotive Consumer Services Group; General Motors Service Parts Operations; and Bell & Howell. The new venture will be an independent limited liability company (LLC) with ownership split equally among General Motors, Ford Motor Company, DCX.NET GmbH (DaimlerChrysler) and Bell & Howell.

This project was initiated jointly by the three auto makers based on a clear need to provide customers with a one-stop shop for their OEM parts needs. (There are numerous multi-brand dealers who now only need one parts cataloging and locator system.)

There appears to be no concern about proprietary information. There will be security firewalls built into the portal to protect confidential and/or proprietary information. In addition, since repair parts are generally not interchangeable between the three auto makers, the new venture will not affect the competitiveness of the three companies.

The parties involved are not disclosing the capitalization of the new company.

What is the role of Bell & Howell?

Bell & Howell is the technology provider. Bell & Howell's expertise in electronic cataloging and CollisionLink technology will serve as the foundation for this new portal. It is possible that additional technology companies will be involved in the venture, either as vendors, or even possibly as equity partners. But Bell & Howell will always be the venture's lead technology provider and integrator.

Where is OEConnection and who will run it?

The new venture will be initially located in Richfield, Ohio, near Cleveland, in separate facilities at Bell & Howell headquarters.

Chuck Rotuno, formerly senior vice president and general manager, Global Automotive Publishing, at Bell & Howell, is the venture's newly appointed president and CEO. Two representatives from each of the four companies make up the board.

Why isn't this a branch of the Covisint project?

Covisint's core business is to offer procurement, supply chain management and product development services related to the manufacture of new vehicles and is an online channel between an OEM and its multi-tiered suppliers.

This new parts portal is a communication platform among an OEM, its dealers and each dealer's OEM parts customers (i.e. repair shops and collision shops).

Will aftermarket parts be handled here?

No. The new portal is intended to service the genuine OEM parts dealer and not the general non-OEM aftermarket.

Will this require FTC approval?

No, we will not need regulatory clearance to begin operations.

Is there a concern about anti-trust laws?

We believe that the efficiencies that this portal creates and the benefits to all involved -- consumers, wholesale parts customers, dealers and each OEM -- are clear, and thus, we are confident that the venture complies with the antitrust laws.

Is the portal operational?

We expect the new portal to begin transactions in 2001. Because the initial functions will be based on existing portal technology (CollisionLink), the new portal will get up and running very quickly.

Who will staff the portal?

The new parts portal will be primarily staffed by Bell & Howell personnel, with several representatives each on loan from Ford, GM and DaimlerChrysler. The portal will eventually have a full-time staff independent of the four companies. Initially, there are less than 50 employees.

Who will use the portal?

We believe that most of the nation's 25,000 dealers and tens of thousands of repair and collision shops will participate in the new portal.

Do you anticipate resistance from dealers?

DaimlerChrysler, GM and Ford will initiate enrollment campaigns with their respective dealers to educate them on the benefits of participating in this portal. The portal will bring new customers to dealers and increase the volume of parts sales.

What will generate revenue? Who will pay?

The portal will derive revenue from those who use it, primarily dealers, through transaction fees and / or subscription fees. Efficiencies created by the portal will actually cost dealers less than they currently spend on parts sales and distribution. We believe that there are significant business opportunities for this portal, but we are not going to speculate at this time about revenues and profits.

Will collision repair shops have to pay to use the portal?

As this portal is a way to link customers (collision shops) with sellers (dealers), the current revenue model does not have customers paying to use the portal.

Are there plans to offer an IPO?

At this time, there is no plan to offer an IPO.

Will other automotive brands become involved?

We believe that these affiliated brands will also participate in the new venture, but initially, the new portal will launch with the OEMs' U.S.-based brands. This venture is initially intended to serve customers in the U.S. and Canada, although we will definitely consider expanding to additional areas. It would be possible for other auto makers to join the venture and receive an equity position. We are very interested in enrolling additional OEMs, as the venture's purpose is to provide a convenient portal for all auto dealers and their customers.

How will insurers be involved?

The response to the question concerning insurer involvement is vague: The efficiencies created by the portal should have the effect of making the sale of OEM parts more cost effective.

Meanwhile, ChoiceParts has sued the Big Three and Bell & Howell on the basis of anti-trust laws and ADP plans to encrypt estimate information. Stay tuned...

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