Covisint sees "corporation" sign up ahead
The auto industry Internet marketplace expects to become legally incorporated next week, a company representative said, enabling it to charge for its services and field a full staff.
Launched in February by DaimlerChrysler, Ford and General Motors, Covisint is a central marketplace for parts auctions and project collaboration between as many as 40,000 companies that do business with the automobile industry--from paper clip manufacturers to multinational chemical conglomerates.
By becoming a legal corporation, Covisint will be able to start charging customers for its online auction as well as for its catalog tools and services. The company, which said it has more than 350 employees, will also be able to start fielding a full staff.
The move brings Covisint closer to going public, something that the company expects to do in the first quarter of next year. The automakers behind the project say they hope the exchange will connect manufacturers and suppliers and will automate and streamline the buying and selling of auto parts.
The company, whose founders include Oracle and Commerce One, is supporting online transactions as part of a pilot program.
The collaboration between the Big Three U.S. automakers sparked government scrutiny in the United States and in Europe. The Federal Trade Commission began an investigation of Covisint in the spring, about the same time it was looking into antitrust issues involving retail industry online exchanges.
American regulators and European regulators were concerned that the automakers would use their combined clout to further cut margins in the difficult supplier market.
Both the FTC and the European Union gave the green light to the project in the fall.