The European Network eXchange has failed so far to meet most of its early objectives.
But Paris-based ENX - a private communications network designed to offer automotive companies greater reliability and security than the public Internet - may be gaining momentum. A new non-profit legal entity has been formed to run ENX and a new chief executive is due to be appointed soon.
That is expected to boost momentum toward a planned link with ENX's North American equivalent - the US Automotive Network eXchange (ANX).
The link with ANX has been targeted for January 1, 2001, but seems unlikely to occur by then.
The new ENX legal entity is taking on the work previously handled by the Frankfurt-based VDA, the German association of carmakers and suppliers.
Work on the European network began in January 1998 at the insistence of the European subsidiaries of Ford, General Motors and Chrysler.
Founding members - Ford, GM and Chrysler plus Volkswagen, BMW and Robert Bosch - signed a partnership agreement with the understanding that there would eventually be a link with ANX.
ENX now counts 21 major OEMs, suppliers and trade associations as members. The members include every OEM in Europe and Tier 1 vendors such as Siemens in Germany and Michelin in France.
The VDA in Germany, ANFAC in Spain, SMMT in the UK and GALIA in France are the trade association members.
Total membership will be limited to 25.
The nonprofit status of ENX mirrors that of the Auto Industry Action Group in the USA, the originator of ANX in 1995. But the future need to adopt a more commercial, profit-driven approach - as happened in the USA at the beginning of this year - remains a topic of debate among members.
ANX was created in response to a growing belief that existing communications systems, including EDI (electronic data exchange), were complex, expensive and inflexible.
The organizers were also concerned that the public Internet was an inappropriate platform for the speedy and secure electronic interchange of sensitive documents.
With $1.5 million in backing from Ford, GM and Chrysler and support from suppliers, the industry-specific communication system was created.
ANX is similar to the public Internet but operates independently while using the same industry TCP/IP communication protocols. While ANX service subscribers can connect to the Internet through the same physical hardware, traffic destined for the Internet does not go onto the ANX network. Subscribers connect to ANX through one of several CSPs (certified service subscribers), most of whom also offer connections to the public Internet as part of their service. Bundled Internet/ANX service is available over the same circuits.
ANX offers OEMs and suppliers a secure and reliable electronic network service to collaborate on product development; solicit and process orders; review designs; post and ship schedules; and trade e-mail messages. This typically replaces multiple network connections between Tier 1 suppliers and customers. For Tier 2 and Tier 3 suppliers it eliminates doing business with multiple automotive trading partners.
Although developed specifically for the North American auto industry, ANX has been moving into other sectors, including the US health care and financial services industries and government. The expansion into other industries has been driven by the sale of the program to Science Applications International Corp. (SAIC) in December 1999. ANX is now operated by ANXeBusiness Corp., a wholly owned subsidiary of SAIC.
Despite ENX's renewed impetus, progress has been slower than originally forecast. ENX organizers say privately they underestimated problems resulting from different languages, a range of telephone carriers, geography, high local call charges and security issues.
Project officials had said they needed to sign up a third of Europe's 11,000 suppliers to return a profit. But to date just 195 registrations - 150 in Germany, 30 in France and 15 in Spain - have been secured.
Of these, 80 percent are believed to be using ENX productively, primarily for CAD/CAM (computer aided design/computer aided manufacture) applications.
Unlike in the USA, where OEMs have taken steps to encourage suppliers to adopt the ANX network, such pressure in Europe has been largely absent.
This has slowed adoption of ENX, as has high investment in existing systems among suppliers.
EDI, which dates back to the mid-1980s, has many acknowledged shortcomings - notably a complicated web of supporting communications systems. But it has proved robust in everyday use despite its complexity and cost.
Sources close to ENX believe that the targeted link with ANX could be completed on schedule at the start of 2001. But industry observers don't expect it to happen that fast.
Despite the complex technical issues involved in connecting the European and US networks, it is likely that political problems will prove harder to solve.
ENX sources say they are anxious to avoid being seen as playing a supporting role. As a result, intense negotiations between the two sides are continuing. But an agreement between ANXeBusiness, the commercial operator of ANX in the USA, and the non-profit ENX in Europe will not be forged easily. ANXeBusiness is taking a more commercial approach.
Alexander Preston, the recently appointed CEO of ANXeBusiness, appears determined to expand the customer base for ANX outside the auto industry and to lower participation costs. Preston was previously vice president, supply and logistics at Visteon.
Whereas a continuous direct link to ANX in the USA can cost suppliers $2,000 a month, dial-up fees are now being progressively introduced - some offering 20 hours of unlimited transactions for $295 a month.
Monthly connection rates by Deutsche Telekom in Germany, one of ENX's CSPs, are believed to range from around DM1,250 (E33) to over DM12,200, depending on the complexity of material transmitted.
Success in Europe in the next one to two years could see ENX also becoming profit-driven.
US suppliers have come under increasing pressure from Ford, GM and DaimlerChrysler in recent months to adopt ANX links. This will be the main way in which the three companies will connect to the Covisint online exchange to secure parts and transmit design information.
For most Tier 1 suppliers, communication with Covisint through ANX now appears inevitable. But differences may surface for lower tier suppliers.
Despite the pressure to adopt ANX links, many Tier 2 and Tier 3 suppliers of less critical parts may still choose to connect to Covisint through the lower-cost public Internet.
Nevertheless, the message from the OEMs in North America is clear, says Johanna Harper, GM's program manager of supplier electronic commerce. She says: 'What you are going to see within the next year is a big migration to ANX. Those who are not on it will be the minority.'