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At GM, Tech Is Steering

As chief technology officer for General Motors (GM), Anthony E. Scott often fields sharp questions from people who demand to know if the company will ever produce another car they can fix themselves. The answer is basically no. "Not unless you're a software engineer," he says.

The giant carmaker has undergone a massive transformation in recent years. Once derided for poor quality, dull design, and declining market share, GM has shaken off those demons. Scott, a Silcon Valley veteran who has worked at Sun Microsystems (SUNW), Price Waterhouse, and Bristol-Myers Squibb (BMY), says informaton technology has played a huge role in the changes.

TECH SPREAD. "Innovation and investment in IT does matter. It can lead to short-term and long-term businesses advantages, and it helps us differentiate GM from rivals," he said at CeBIT, the big tech trade show under way in New York May 25-27.

Today's cars are rolling computers. In 1970, the average automobile had about 100 lines of software code. That number mushroomed to 100,000 by 1990, and Scott expects it to hit 100 million by 2010. Already, the average car includes 30 microprocessors that control every thing from radios and airbags to GM's OnStar, a sophisticated satellite-based navigation and customer-assistance system.

Digital capabilities create all sorts of new services. GM cars are loaded with a combination of wireless sensors, global-positioning technology, and telematics, which which send information back to the auto maker for analysis. People will soon see that combination of technology in all sorts of products beyond the car industry, Scott says. Lightbulbs and tubes of toothpaste will have similar capabilities.

BETTER TREND READING. The outward signs of technology riding on the dashboard reflect its much broader use within GM. Everything from product design, manufacturing, quality control, and sales has been touched by IT.

The product-development cycle has been slashed from 4 years to 18 months at GM. In the old days, the carmaker found it couldn't really predict what would be in fashion years in the future. So it ended up being a "late follower" of important trends or designing bland cars. Now, the shorter development cycle means GM can design models with a better sense of what will be popular. That allows it to take more chances. The outfit will release a record 29 new models during the next 16 months, many of them based on head-turning designs.

Scott also credits technology with cost savings and better quality. The two-way OnStar communications system allows the auto maker to collect performance data from cars that are on the road. It can notify owners right away if their vehicle appears to need significant work. That has helped reduce GM's huge warranty expense.

QUALITY BOOST. Even the company's IT budget itself has dropped to $3 billion a year, from $4 billion, as GM has become a better user of IT, reducing the number of hardware and software systems to 3,000, from 7,000. Ultimately, the goal is to reduce it to 1,000.

And since cars are designed and built more quickly, Scott says fewer opportunities for error exist. The quality of newer models coming off the line is, for the first time, better than the quality of the time-tested ones they're replacing he says. GM says it ranks third in quality behind No. 1 Toyota and Honda, and is aiming to overtake the latter.

Technology also has provided a platform for new products and services such as OnStar, which has 2.5 million subscribers and has been licensed to other carmakers. Scott says the OnStar business is profitable. He's also excited about a new IT-based feature called adaptive cruise control. When turned on during highway driving, it automatically reduces a car's speed if a sensor detects that a slower vehicle is in the way.

Ultimately, IT will even displace the engine, transmission, and steering wheel, truly redefining what a car is. Scott expects that the combustion engine will be replaced by hybrids, which will give way to vehicles powered by hydrogen fuel cells that emit no exhaust but pure water. That will be great for the environment, although it probably won't make do-it-yourself mechanics too happy. By Steve Rosenbush in New York

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