General Motors and DaimlerChrysler on Thursday became the latest corporate giants to hook employees up with the Internet, announcing a broad agreement with America Online to provide low-cost access to nearly 300,000 US workers.
GM, the world`s No. 1 automaker, and No. 5 automaker DaimlerChrysler said they will provide unlimited AOL access at a cost to the employee starting at $3 a month, below the usual $21.95 a month.
Workers will be able access personalized employee Internet portals, which will provide a variety of information such as health and retirement benefits, work schedules and other features as yet unimagined.
"This will help in a lot of ways," said GM Chief Executive Officer G. Richard Wagoner. "If we told you today everything we are going to do, we would probably leave out 90% of the stuff, and half of it would be wrong."
The deal also includes offers for unionised and salaried workers with the automotive giants to get at a discount Hughes Electronics` DirecTV interactive television service, or a receiver set-top box from Philips Electronics. Hughes is a unit of GM.
For $5 a month, workers will be able to access AOL through AOLTV service, which brings the online service to television sets through the Philips receiver. Or employees can choose to receive AOLTV through the Hughes DirecTV package at a cost of $31.95 a month.
The companies declined to provide financial details of the deal, which is expected to begin rolling out in the first quarter of 2001. However, DaimlerChrysler North American president Jim Holden said the deal fits in with its strategy of trying to connect to employees over the Internet.
"It is imperative that all our employees have access to the Internet," Holden said. "We are spending a lot of money trying to create links with our employees. We think there is efficiencies there."
Holden said the service will be expanded to Canada, and DaimlerChrysler will later consider taking it worldwide.
No. 2 automaker Ford Motor announced in February it would give free personal computers and printers to workers, plus $5 a month Internet access.
GM said about 75 percent of its workers already have personal computers, so it decided against a deal similar to the Ford plan.
The AOL agreement also includes links to Workscape, a Reston, Va.-based online human resources company that the automakers plan to invest in. Workscape will develop the employee Internet portals for the automakers.
Workscape has partnered with Sun Microsystems and iPlanet, as well as AOL, to create a platform which the automakers use for their employee portals.
It was the third deal this week with a major company for AOL, which is awaiting US regulatory clearance for its merger with Time Warner.
AOL, the world`s largest Internet provider, struck a multi-year, global pact with financial services firm Charles Schwab & Co, and a multi-year marketing agreement with food giant General Mills earlier this week.
"This is important because AOL is again aligning itself with large traditional companies, increasing its subscriber base and moving the medium closer to becoming a "must-have" utility for the mass consumer market and increasing its ties to the auto industry," Merrill Lynch analyst Henry Blodget wrote in a research note.
Blodget said the deal could be worth $30 million to $40 million annually in new revenue for AOL if it is able to sign up new accounts for half of the employees. About one-third of the employees likely already subscribe to AOL, Blodget said.
"The incremental subscribers, moreover, will obviously lead to additional advertising revenue," he said.
GM Chief Executive Officer G. Richard Wagoner said its employee portal will contain advertisements, but details of which company would collect revenues from those ads has not been worked out.
Several major corporations have announced plans to give employees free or subsidized personal computers with Internet access at home, including Ford.
Other companies providing Internet service include Delta Air Lines, American Airlines parent AMR. and Intel, the world`s largest computer chip maker.
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