Covisint, the online automotive trade exchange, says it could begin operating in the first week of November, though it appears prepared to go up much sooner.
Key to an early launch is quick approval by the US Federal Trade Commission. Covisint spokesman Dan Jankowski said planners are optimistic the FTC will approve it by early October.
Based on the lack of objections from Washington and last month's approval of another large trade marketplace in the USA, the signs look good.
Once FTC approval comes, Covisint can move quickly. Planners would need to incorporate the company; hire permanent workers at its temporary headquarters in Southfield, Michigan, USA; and choose a CEO.
That process might take 30 days, but could be much quicker.
'We are not a business right now,' Jankowski said. 'We have to do the legal paperwork. We've got to hire people. Covisint is not a legal entity to hire people. So within a 30-day window, all that stuff will come together.'
Industry observers say it is critical that Covisint, which was announced in February, begins operations as soon as possible if it is to become a credible e-commerce player.
'They need to get up and running, even if it's just a small function like auctioning off excess inventory - something that provides some value that people need today that they can't get anywhere else and are willing to use,' said Kevin Prouty, senior analyst at AMR Research in Boston, Massachusetts, USA. 'Something that's easy to get their hands around. I think that gives them a lot of credibility right away.'
Covisint planners have been saying all along that they will be ready to go after FTC approval.
'If they wouldn't, this would be a huge loss of credibility,' said Michael Heidingsfelder, a partner at RolandBerger Strategy Consultants in the Troy, Michigan, USA, office. 'They don't have any other choice - just start and get things running.'
Nobody expects Covisint to have its entire product range - procurement, product development and supply-chain management -ready in the first release of software, Heidingsfelder said.
The first software release, the e-commerce tools that suppliers and automakers will use to communicate with each other, will be ready, Jankowski said.
The FTC is handling Covisint with great care because of its size.
In August, the FTC approved Trade-Ranger.com, a marketplace for the energy market led by Royal Dutch/Shell, BP Amoco plc and 12 other oil refiners and the trading unit of Mitsubishi. Trade-Ranger plans to process transactions on its marketplace beginning this month.
The difference between the exchanges is that Covisint is much larger. It is expected to be the world's largest Internet marketplace, handling up to $750 billion in annual purchases by automakers and suppliers.
The outside world may never know how much the FTC influences Covisint's final shape.
Reed Freeman, a former FTC staff member who represents the Original Equipment Suppliers Association in Troy, Michigan, said the government's first option is to negotiate privately with Covisint until it is comfortable with the structure and planned operations.
'I suspect the government is in dialogue with Covisint [now],' said Freeman, a lawyer with the Washington, DC, firm of Arent Fox Kitner Plotkin & Kahn.
Only if the FTC and the exchange disagree on some points would details have to be made public.
Jankowski said Covisint planners have not had to negotiate with the FTC on any issues.
'They're asking for information and looking for clarification - what does this mean, and how is this going to operate?' he said. 'They're trying to understand what Covisint is intending to be.'
If the FTC and the exchange disagree on some points, the agency and Covisint could agree to settle their differences publicly, Freeman said. If no agreement were reached, the FTC could go to court to try to enforce its will.
Freeman described the last option for businesses as 'a high-stakes, high-cost, an almost bet-the-company deal.'
Freeman, however, does not expect the FTC to be tough on Covisint.
For one thing, the agency is just learning how electronic exchanges work. More broadly, the government as a whole has a wait-and-see attitude toward business conducted over the Internet, he said.
'The FTC gets a bad rap, but they do not want to put up an artificial barrier to business in the competition area. They'll go after fraud in a blink,' Freeman said.
FTC officials refuse to talk specifically about Covisint, but they do discuss generally the agency's interest in electronic marketplaces.
Susan DeSanti, the agency's director of policy planning, said she does not believe there is a need for new FTC guidelines to control the exchanges because the same rules that regulate businesses elsewhere also apply online.
Freeman said that if no guidelines are issued, the FTC would establish standards for exchanges through future enforcement actions.
In other words, exchange owners and participants will see what activities the FTC considers unacceptable by watching the ones it attempts to block.
FTC policy makers and enforcement personnel 'do talk to one another,' DeSanti said.