IT service provider, today announced that it has signed a year information technology outsourcing agreement with Innovation Auto Risk, a provider in claims management services to insurers and fleet management companies.Innovation Auto Risk was seeking an IT solution provider that could supply and manage its IT infrastructure in a resilient yet cost-effective fashion. The deal focuses to support its growth and expansion plans, said a press releaseAs part of the agreement, IBM would deploy server, storage, networking and security IT infrastructure to be hosted at a data center in Delhi. It would provide on-site infrastructure monitoring services from an on-site command center. In addition, IBM would also provide managed services and ongoing project management for infrastructure procurement, commissioning and configuration, as well as hardware refreshes after five years.Innovation Auto Risk, headquartered in Delhi, has claims servicing operations across India. It is a joint venture between Auto Risk Management Services Pvt. Ltd., a provider in pre-risk inspection services and other related insurance services, and Innovation Group plc., a provider of enterprise software, business process outsourcing and repair and service network management solutions to the global Property and Casualty industry.put together a customized end-to-end managed services package and introduced Innovation Auto Risk to an operating-expense driven model, rather than capital-expense driven model. This allowed the company to pay IBM as-it-grows its business operations thus removing the need for large capital influx to sustain its growth and expansion. This agreement aims to reduce Innovation Auto Risk's capital expenditure on IT by per cent, said the release.country manager - ibm.com, IBM India/South Asia remarked that Innovation Auto Risk needed to build a robust infrastructure to address the growing claims processing requirements of their customers and they were able to provide this using a unique model that helped them grow without the headaches of managing their back-end and the need for huge capital requirements. We are delighted with our agreement with IBM and believe its technology expertise and focus on delivering cost-efficient solutions will help us achieve our growth strategy and higher levels of customer satisfaction," said Manu Mehta, director, Innovation Auto Risk To effectuate this transaction, substantial taxpayer dollars were utilized. The commitment made was for a total of billion in debtor-in-possession and exit financing. Because of the accelerated time frame of the bankruptcy, the proportion of the funding through debtor-in-possession funding was smaller and the exit financing was larger than initially expected. Ultimately, billion of funding was provided in debtor-in-possession loans and billion was provided in exit financing. Added to the exit financing was a million commitment related to a loss sharing agreement with that is not expected to be utilized. Also, the governments of Canada and Ontario funded more than billion in debtor-in-possession and exit financing. The Company's successful emergence, in conjunction with financial support from the U.S. and Canada, has put New Chrysler on a solid footing to succeed and generate jobs well into the 21st century.Because of the credit crisis and the rapid decline in auto sales, many of the nation's auto parts suppliers have struggled to access credit and have faced uncertainty about the prospects for their businesses. Suppliers that ship parts to auto companies generally receive payment approximately days after shipment. In a normal credit environment, suppliers can either sell or borrow against those commitments--so-called "receivables"--in the interim period to pay their workers and fund their ongoing operations. However, due to the uncertainty about the ability of the auto companies to honor their obligations, banks had been unwilling and are still somewhat reluctant to extend credit against these receivables.he Auto Task Force implemented a Warranty Program to give confidence to GM's and Chrysler's customers during a period of substantial uncertainty regarding the outlook for the companies. With the successful emergence of the new companies, consumers can now feel assured that the companies have the financial wherewithal to meet their warranty commitments on a continuing basis. As such, the Auto Task Force determined that it was appropriate to end the Warranty Program. I am happy to report that million invested in the program has been returned to United States Government along with interest payments on the program from New Chrysler. This achievement represented a prudent the President appointed an Auto Task Force to oversee his Administration's efforts regarding the industry. The Task Force is co-chaired by Treasury Secretary Timothy Geithner and National Economic Council Director Lawrence Summers, includes representatives from across the executive branch and is staffed by a joint Treasury-NEC team, of which I am now the senior member. This team reports to the Task Force and its co-chairs, who report up to the President.From the beginning of this process, the President gave the Auto Task Force two clear directions regarding its approach to the auto restructurings. The first was to behave in a commercial manner by ensuring that all stakeholders were treated fairly and received neither more nor less than they would have simply because the government was involved. The second was to refrain from intervening in the day-to-day management of these companies.As with the funds provided to the auto industry by the prior administration, the funding provided by the Obama Administration was allocated from the TARP as authorized under the Emergency Economic Stabilization Act of The terms of the debtor-in-possession were consistent with EESA requirements and protected the American taxpayer.Because the investments made by both the prior and current Administrations to support the auto companies have come from the , the Task Force and its staff's activities have been subject to the full range of disclosure and reporting requirements under the EESA statute. In addition to reporting to this committee, this includes and multiple House and Senate committees. Most recently, published a report in June of this Judiciary committee as well as held dozens of meetings with Members of Congress and their staff and almost constant telephonic communication. The Auto Task Force will continue to be as responsive as possible to the requests of these entities to ensure thorough transparency and accountability for our actions.In addition, the Task Force has conducted broad outreach over the past several months to affected stakeholders, industry experts and other constituencies that have requested such meetings From the beginning of this process, the President clearly directed the Auto Task Force to refrain from intervening in the day-to-day management of GM and Chrysler. Our role has been to act as a potential investor of taxpayer resources, and as such we have not become involved in specific business decisions like where to open a new plant or which dealers to close. This is the job of management and while we have been engaged in dialogue and discussion about their approach, we have not substituted our judgment about specific decisions for theirs. Our goal is to promote strong and viable companies, which can be profitable and contribute to economic growth and jobs without Government support as quickly as possible. Using GM or Chrysler as an instrument of broader government policy is inconsistent with these goals Given the emergence of the New GM and the New Chrysler, the involvement of the Auto Task Force with the companies will now change. The companies are being run as commercial enterprises by their management teams, and they will report to new, independent Boards of Directors. The task force was involved in recruiting many of these directors, and I am proud to report that both Boards are filled by men and women of extraordinary distinction, independence and commitment to the obligations that they have accepted. In acting as a lender and investor in New Chrysler and New GM, the Auto Task Force will closely monitor the loans and investments made in both companies going forward.As the President has made clear, The Obama Administration is a reluctant shareholder in New General Motors as well as New Chrysler. We inherited a situation in which GM needed substantial capital. At the same time, GM had been hobbled for years by an unsustainable debt burden. In this context, piling on irresponsible amounts of new debt on top of the new GM would have simply repeated the mistakes of the past. Likewise, giving away the equity stake to which taxpayers were rightly entitled would have been irresponsible. Therefore, the Administration made the decision to take the equity that taxpayers are entitled to, alongside a firm conviction to manage that investment commercially and exit our position as quickly as is practicable. The Administration has articulated a set of four principles that will govern its approach to managing ownership interests in financial and automotive companies that will apply directly to the government's approach to New Chrysler and New GM:The express purposes of are, among other things, to "restore liquidity and stability to the financial system of the United States," and to ensure that expenditure of taxpayer funds "protects home values, college funds, retirement accounts, and life savings," "preserves homeownership and promotes jobs and economic growth," and "maximizes overall returns to the taxpayers of the United States.Consistent with these purposes, and pursuant to section of the Secretary of the Treasury has promulgated guidelines for allocating resources under TARP to "prevent a significant disruption of the American automotive industry that poses a systemic risk the Secretary of the Treasury issued a written determination, in consultation with the Chairman of the Board of Governors of the Federal Reserve System, that certain holding companies engaged in the manufacturing of automotive vehicles are eligible for funding under the Significant Failing Institutions Program. See Determination of the Secretary of the Treasury, By letters dated December to "the appropriate committees of Congress" the Senate Committees on Finance; the Budget; Banking, Housing and Urban Affairs; and Appropriations; and the House then Secretary of the Treasury Henry M. Paulson, Jr. delivered a written notification of that determination pursuant to section of True and correct copies of the Secretary's determination and letters to Congress are attached as Exhibit A.
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