Covisint CEO Resigns, Another 100 Jobs Cut - Ok who did not see it coming?

DETROIT Friday June 28 Reutersreported that online automotive parts marketplace Covisint said on Friday that Chief Executive Officer Kevin English resigned, the second top executive to leave the company this month as it cut another 100 jobs.

Covisint, created by the Big Three U.S. automakers during the e-commerce euphoria, said it cut about 100 salaried and contract jobs earlier this week, reducing its work force to under 300 people. In April, Covisint cut about 50 jobs in the United States, half of those contract workers.

Covisint named Harold Kutner, 61, the former head of purchasing at General Motors Corp. as chief executive officer, replacing English. Kutner recently retired from GM, where he earned the reputation as a strong manager, able to wring costs out of the automaker's huge supply chain.

Kutner said he did not expect to make drastic changes in Covisint's business and repeated English's promise that Covisint would be profitable by year end.

"I still believe very strongly that Covisint will connect the automotive industry ... so that we can be operating in a virtual environment with speed beyond what many industries have dreamed about," Kutner said.

But some industry analysts said they expected that Covisint would face more trouble.

"I think it's reasonable to assume that Covisint won't be around in a year or two," said John Henke, president of Planning Perspectives Inc. of Birmingham, Michigan, an industry consultant to automotive suppliers.

Earlier this month, Darren Gifford, Covisint's vice president of global sales and marketing, resigned, becoming the second person to leave that job in less than a year.

Covisint was set up in February 2000 by Ford Motor Co., GM and DaimlerChrysler AG with the aim of helping automakers cut billions of dollars in costs by collaborating with their partners and suppliers over the Web.

But Henke, also a professor of marketing at Oakland University, said suppliers feared the exchange could hurt their profit margins by turning their products into commodities. Suppliers also resented being forced by the automakers to join Covisint, he said.

"It got into the whole issue of trust between suppliers and the OEMs (automakers)," he said. "You've gone to a lot of parties that I'm sure your wife or girlfriend wanted you to go to and you weren't enthused."

Many other so-called business-to-business Internet suppliers that promised to connect industries over the Web, cutting costs and saving time, have gone our of business over the past few years. A few others have struggled to redefine their business.

English, 49, joined Covisint in April last year. He was previously the managing director and chief executive officer of e-commerce at Credit Suisse First Boston. He said he resigned to be with his family on the East Coast, where he has other business opportunities.

Editors Note: A bad idea is a bad idea and the folks here at TACH just couldn't believe that money was being invested in Covisint, would the big three have invested in a joint buying service before the Internet...of course not, so why invest millions in a bad cyber idea?