General Motors Brings in the IT Crowd

Auto giant General Motors (NYSE: GM) said Friday that it is planning to hire thousands of information technology workers in the next three to five years.

According to the Detroit News, 90 percent of General Motors' IT is currently handled by roughly 10,000 workers outside of the company, while only 10 percent is handled by its small global IT workforces of about 1,500.

The bigger problem is that, of those 11,500 combined people, roughly 75 percent work on supporting the business, leaving only 25 percent to work on innovation. Randy Mott, GM's vice president of information technology, said that the company has to change that.

The Detroit News reported that it is possible that some of the current contractors will simply swap companies and become fully employed by GM.

One of GM's largest providers of IT contractors, Capgemini, signed two contract renewals two years ago worth $250 million over five years. There has been no word how this latest news would affect that deal.

"We hope to provide high value services to them throughout the transformation and into the future," Capgemini spokeswoman Jill Wilmot said to the Detroit News.

But Mott is being very clear, saying "We want to simplify the environment that we run in so it takes less effort to do that and at the same time drive more capability to our business."

GM's new IT policy comes in the same month that the company announced that it is overhauling its lineup in order to increase its market share in Brazil.

Benzinga reported that GM has launched seven new vehicles in Brazil over the past 12 months, with two more due before the end of 2012. Senior Vice President Marcos Munhoz said that, "Our sales forecasts were wrong for all of the recent launches. Each model sold more than we expected."

One area that GM doesn't want to pump any more money into is social media marketing, with Benzinga reporting that GM believes that paid ads on Facebook (NASDAQ: FB) have little impact on car sales, raising questions about Facebook's ability to maintain 88% revenue growth. First quarter ad revenue was down 7.5% but, more importantly, GM's decision highlights the fact that Facebook's continuing success is not a sure thing.

Estimates suggest that, prior to GM's decision, it had spent $10 million on Facebook advertising. Even though it measures revenue in billions, any company will be unhappy to lose that amount. But it isn't the immediate sum of money that will worry Facebook the most, it is the possibility of other companies taking note and following suit.

"It's not unusual for us to move our spending around various media outlets - especially with the growth of multiple social and digital media outlets," GM said in a statement. "In terms of Facebook specifically, while we currently do not plan to continue with advertising, we remain committed to an aggressive content strategy through all of our products and brands, as it continues to be a very effective tool for engaging with our customers."

On Friday, General Motors traded at about $19.50, up roughly 0.9 percent.

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