News From the Auto Industry

The Reynolds and Reynolds Company (NYSE:REY) stated today that it is continuing negotiations with General Motors toward a definitive agreement whereby Reynolds would become GM’s exclusive provider for dealer e-business technology.

The two companies announced that they had signed a Memorandum of Understanding on May 16, 2000.

The components that GM has begun making out of the new tailored blanks are upper floor pans for the underbodies of a number of car lines, including the Buick Park Avenue and Riviera, the Cadillac Seville and DeVille and the Oldsmobile Aurora. More than 6 million pounds of flatrolled steel probably will be required during the first year of production to make the tailored blanks, and the applications will be expanded in GM’s 2000 model-year cars by enough to double steel requirements to more than 12 million pounds annually.

From the steel industry’s perspective, the most important thing about the floor pan applications is what the floor pan application may mean for the future use of tailored steel blanks in cars, pickup trucks, sports utility vehicles and vans. Anything that makes steel more attractive as the production material for body and structural components in the higher-fuel-economy/lower emissions vehicles of the future is a “plus” for mill suppliers and those companies that furnish them with processing services.

David R. Holmes, chairman and CEO said, “Reynolds and Reynolds is striving to build an alliance that will create shareholder value and achieve a seamless retailing experience for consumers and efficiencies for GM and its dealers.”

Reynolds and Reynolds headquartered in Dayton, Ohio, is the leading provider of integrated information management solutions to the automotive retailing marketplace. The company’s services include a full range of retail and enterprise management systems, networking and support, e-business applications, Web services, learning and consulting services, customer relationship management solutions and leasing services. To find out more about the company, it’s vision, products and services, visit www.reyrey.com.

Because of the new methods, steel stands to become an even more attractive material than it has been up to now for use in cars and other family vehicles in which fuel economy improvements must be achieved.

A GM source said that all of the steel for the 1999 model applications probably will be coming from Bethlehem Steel Corp., Bethlehem, Pa. An independent manufacturer of tailored blanks, Prototech Laser Welding Co., Clinton Township, Mich., is fabricating the blanks on a toll-processing basis for Bethlehem Steel, which sells them to GM.