DETROIT General Motors Co will open a fourth U.S. information technology center as part of its plan to bring that work in-house and improve the automaker's efficiency and productivity.
GM said on Wednesday it would hire 1,000 people, including software developers, database experts and business analysts, to staff the center near Phoenix, Arizona. It will be the last of the four centers in the United States GM previously said it would open.
Last summer, GM, a pioneer in outsourcing information technology, said it would reverse that trend with plans to expand vastly the number of in-house IT experts over three years.
At the time of the announcement, GM outsourced some 90 percent of its IT services and provided 10 percent of that work in-house, an approach that had been the model at the Detroit company for most of the last three decades. The U.S. automaker said it planned to flip those percentages.
"We're actually ahead on the (IT) innovation centers," GM Chief Information Officer Randy Mott said on a conference call. "It doesn't mean that we don't still have a long way to go because we do, but these are kind of the key ingredients to allow us to do that."
In January, GM said it would open a third center near Atlanta, joining Austin, Texas, and Warren, Michigan, as part of the company's strategy.
Mott said the company chose the various locations based on the availability of talent, a lower cost of living and a high-tech industry presence. He said GM would not be hampered by not opening a location in Silicon Valley, California.
"There's not a lock on innovation there," he said of Silicon Valley. "It just happens to be a collection point. There are high-innovation centers outside of there."
Mott, a former Hewlett-Packard Co executive, outlined his plans last June to GM's IT employees, which then numbered about 1,500. GM currently employs almost 5,500 people on its IT staff and that number will rise to about 9,000 when the transition is complete, Mott said on Wednesday.
GM, which has not disclosed the cost or savings of its strategy, is targeting 30 percent to 35 percent of the hires being recent college graduates, who add a high level of energy, he said.
Last October, GM said it would shift 3,000 people over six months to its payroll from HP, which has long handled IT work for the automaker. Mott said most have joined GM and the rest of the shift will be completed by April 1.
In the two months prior to that, GM had announced plans to hire 2,000 workers to staff new IT centers in Texas and Michigan. The Arizona center will be located in the Phoenix suburb of Chandler.
Effective April 1, Mott said GM will open a temporary center in Arizona and begin hiring. The new, $21 million center, which GM will lease, is expected to open by the first quarter of 2014.
GM also said last summer that as part of its plan it would shift from 23 data centers worldwide to just two, both in Michigan. It opened one in Warren, and is still looking for the second location. Mott said the second location could be in Milford.
(Reporting by Ben Klayman; Editing by Dale Hudson)