York outsources to EDS to cut costs, improve IT

York International Corp., a large maker of heating and air conditioning products that has been trying to cut costs, has outsourced the management of its IT infrastructure to Electronic Data Systems Corp. (EDS).

Handing over management of its IT infrastructure to a third party such as EDS will help York in its efforts to transform its business, ignite future growth, lower costs, develop new products and improve its distribution, EDS and York said in a joint statement Monday. With EDS in charge of its daily IT operations, York will be able to adjust its IT infrastructure more quickly to changing business needs, the companies said.

EDS will take over “a good majority” of York’s IT infrastructure management, including its PCs, global network, servers and e-mail system, in a 10-year, $426 million deal, an EDS spokesman said Monday. EDS will also be in charge of upgrading and enhancing York’s IT infrastructure to support York’s current and future business strategies, he said. The deal also involves transferring York IT employees to EDS, the EDS spokesman said, declining to provide a specific number.

York closed its 2002 fiscal year, ending last Dec. 31, with revenue of $3.8 billion and a net loss of $98.3 million. This compares with 2001 fiscal year revenue of $3.9 billion and net income of $46 million.

The company in November announced changes in its leadership team, as well as plans to consolidate and reorganize two of its business units in order to cut costs and improve efficiency. In December, York announced it would consolidate two manufacturing plants in Illinois into one and that it would divest itself of its Sparta, North Carolina, plant, which it had closed in August 2002. It also announced in February 2003 that it was considering other cost-cutting measures, such as further reducing manufacturing capacity and eliminating product lines and small noncore businesses.

York, based in York, Pennsylvania, makes heating, ventilating, air conditioning and refrigeration products, which are sold in more than 100 countries. The company has about 23,000 employees worldwide.

EDS, in Plano, Texas, is the world’s second-largest provider of IT services.