FreeMarkets OnLine Creates Pact with General Motors
17 September 1998FreeMarkets OnLine Creates Pact with General Motors; Global Automobile Manufacturer Adopts Revolutionary Online Marketplace
PITTSBURGH, Sept. 17 -- FreeMarkets OnLine, Inc., the world's first and leading online industrial market maker, today announced it has signed a contract with General Motors Corp. , under which it will provide its unique online market channel to the automaker. Glen Meakem, FreeMarkets' President, CEO and Co-founder, said the deal is based on creating a virtual marketplace for automotive suppliers to bid on "direct material components" for automobile production and assembly. Financial and other terms of the deal were not disclosed, but with 1997 revenues of $178 billion, GM is the world's largest buyer of parts and materials for assembly into automobiles. "This agreement marks the beginning of an important trend in American industry," said Mr. Meakem. "A major automobile manufacturer is replacing the traditional negotiations between its purchasing department and automotive suppliers with our online markets. GM's size and importance to the economy validate the role of online markets for direct material components and commodities. Large buyers that are slow to embrace this approach will pay a price because they will have higher costs than their early adopting competitors." Under the agreement, GM will subscribe to the FreeMarkets OnLine(R) global online marketplace which is built upon FreeMarkets' BidWare and BidServer technologies. FreeMarkets will manage all aspects of the marketplace and will provide its unique market making process. Mr. Meakem said the deal is indicative of FreeMarkets' explosive growth and its ability to generate results across a broad spectrum of industries. Fueling this growth has been FreeMarkets successful "market-making" in product categories ranging from printed circuit boards to machined parts. "Nobody else in the broad electronic commerce or online market industries focuses on production material", says Meakem. "Production materials require a whole different level of understanding. That's our business, and that's what GM recognized." Market volume in FreeMarkets' online market channel across all of its clients is forecasted to increase from $100 million in 1997 to approximately $500 million in 1998. Staffing has skyrocketed from just two employees in early 1995 when the company was founded, to more than 85 today and should exceed 100 by year-end. About FreeMarkets OnLine FreeMarkets is the world's first and leading industrial market-making company. Using its proprietary BidWare(R) software suite, the company creates custom online markets for large buying organizations. Since 1995, FreeMarkets' revenue has grown close to 400 percent annually and its staff has increased from two to more than 85 technical, support and market-making professionals. Its client list now boasts some of the world's largest companies. In recognition of its bold business strategies, success and spirit, FreeMarkets OnLine recently received the Ernst & Young Entrepreneur of the Year Award for Western Pennsylvania. For more information visit http://www.freemarkets.com.