IBM wheels away with $1 billion Michelin outsourcing contract

Tire maker Michelin has decided to hand over management and maintenance of its IT infrastructure in North America and Europe to IBM’s Global Services unit in an eight-year deal worth €1 billion ($1.22 billion), IBM announced on Thursday.

The services IBM will provide include data center management and help desk support, an IBM spokesman said. Compagnie Générale des Établissements Michelin, in Clermont-Ferrand, France, will transfer about 600 employees over to IBM as part of the deal.

Areas not covered by this agreement are Michelin operations in Asia and South America, where the company is still handling the IT infrastructure management in-house, said Fabienne de Brebisson, a Michelin spokeswoman. She declined to say whether the company plans to outsource the IT infrastructure management in those regions.

IBM is scheduled to begin providing these services to Michelin some time in the first quarter of 2004, she said. Michelin expects that the deal will improve the performance of its IT operations for its internal users and its clients and reduce IT costs, she said.