Forty suppliers are being offered profit sharing in lieu of an equity stake in Covisint. The plan calls for sharing of earnings before interest and taxes, or EBIT.
The suppliers are from Tiers 1, 2 and 3, and include some minority suppliers, said Alan Turfe, one of three co-CEOs leading the development of Covisint.
Four months ago, when DaimlerChrysler, Ford and GM announced creation of the online exchange, suppliers immediately asked for an equity stake. Automakers rebuffed them. But D/C, Ford and GM want suppliers to embrace Covisint. The profit-sharing plan is a way for the automakers quickly to get a group of them on board.
So far, six major suppliers have signed letters of intent to use Covisint and have announced their plans. Another 24 suppliers have signed letters and will make announcements shortly, Turfe said. The profit sharing offer also has been made to 10 other suppliers that haven3/8t signed on.
Turfe also is executive director of GM's online TradeXchange.