When General Motors' Ralph Szygenda negotiated a deal two years ago with Reynolds and Reynolds Co. to replace the management system used by all Saturn dealers, he was doing what he knows best: driving down prices and standardizing equipment.
But GM's formidable chief information officer hadn't counted on a tough new owner at Reynolds.
After Bob Brockman — the publicity-shy owner of Universal Computer Systems Inc. — acquired Reynolds last year, Brockman soon started haggling with Szygenda over software revisions and the project's proposed launch date.
Now these two heavyweights of information technology are going toe-to-toe: On Oct. 4, Reynolds sued GM in U.S. District Court in Detroit for breach of contract, alleging that GM should pay for a host of proposed software revisions. GM promptly countersued.
As the court battle unfolds, 440 Saturn dealers are shedding few tears. Many dealers do not want to switch from their old ADP systems to the new Szygenda-mandated Reynolds system.
"The general feeling from our three Saturn stores ... is they're relieved that they won't have the expense of switching over," says John Steffy, information systems manager of Findlay Automotive Group in Henderson, Nev.
But what about 300 non-Saturn GM dealerships that also bought the new Reynolds system? GM negotiated an attractive price on behalf of those dealers. Will GM continue to represent them, or will they have to negotiate renewals with Reynolds on their own?