Goodyear inflates IBM profits with major outsourcing deal

Tyre giant Goodyear has signed a five-year outsourcing deal with IBM Global Services, extending an existing seven-year agreement.

IBM's services arm will take over the complete management of Goodyear's central mainframe server at its Colmar-Berg site in Luxembourg.

Under the terms of the contract, Goodyear is guaranteed service 24 hours a day, seven days a week. The company hopes to lower its maintenance costs and gain access to the latest technological developments.

The mainframe serves over 3,000 users throughout the EMEA region, and is a 120 MIPS CPU with one terabyte of overall disk storage capacity.

IBM will take charge of the management of the hardware, the maintenance of the operating system, and the mainframe system tools. Big Blue will also handle security and back-up procedures in case of any system failure.

The contract also covers finance for hardware and software applications, while Goodyear remains in full charge of applications product-development and maintenance.

Financial terms of the deal were not disclosed.

Kenneth M Tweedie, Goodyear's IT infrastructure director for EMEA, said in a statement: "In 1996, we decided to outsource the management of our mainframe. We had three main aims: to reduce our costs, ensure we had permanent access to the human and technical resources needed to ensure the smooth running of our operations, and to focus on the move towards the client/server world."

Goodyear Europe has 21 sites in the EMEA region, including the Colmar-Berg site which houses its regional information technology centre. That serves all production, distribution and sales facilities throughout Europe, the Middle East and Africa. Goodyear employs 95,000 people worldwide and has an annual turnover of $14 billion.

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Good news for IBM. But of little comfort to the 2,000 employees who lost their jobs a couple of weeks ago..