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Big Three sell Covisint auction business

FreeMarkets Inc., an operator of online auctions, has agreed to acquire for an unknown sum the auction business of Covisint LLC, which was founded by the Big Three manufacturers to help them do business online with their suppliers, but which has disappointed expectations of an e-commerce-led supply chain revolution.

FreeMarkets will provide sourcing services to DaimlerChrysler, GM and Ford under long-term agreements. The company may also provide its online supplier tender auction technology to manufacturers such as Mitsubishi, Nissan, Renault, PSA Peugeot Citroen, Fiat and other Covisint customers.

The Big Three and Nissan created Covisint in 2000 as a supply cooperative. It was originally projected to broker the sale of $240 billion-worth of componentss every year, generating an estimated $5 billion in revenue.

But due largely to competition from other auction sites and reluctance on the part of some suppliers to work through Covisint, the company has fallen well short of that mark. It has helped hold auctions for $120 billion in goods since it commenced business three years ago.

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