The Defense Department is closely watching a joint effort by Electronic Data Systems Corp. and American Telephone & Telegraph Co. to build a high-technology, worldwide telecommunications system, according to EDS Chairman H. Ross Perot.
Perot said Saturday that the system under development by AT&T and EDS, which is wholly owned by General Motors Corp, "will be the most modern, state-of-the-art system in the world" -- one that will change dramatically the current methods of transmitting electronic data.
EDS and AT&T last week announced that they had entered a renewable business agreement to build a global telecommunications system. The announcement effectively marked GM's emergence as a major player in the telecommunications market and indicated the auto maker's wants EDS to play a key role in defense and other government contracting.
GM purchased the Dallas-based EDS, one of the nation's largest computer services companies, for $2.55 billion last summer.
The telecommunications system in question will be designed specifically for GM and will enable the auto maker to communicate instantly with assembly plants, dealers and suppliers around the globe, Perot said.
"You're going to see dealers with antennae on their roof," he said. Perot said he envisioned a time when the new technology would enable dealers to diagnose automotive ills simply by attaching computers to cars and then using those computers to tap into technical information banks.
Perot said the Defense Department is interested because changes in telecommunications often are outdated by the time they are put into place.
"If you go into the systems that are in Washington that allow the president and the joint chiefs of staff to communicate, you'll find that these systems were built over a period of time, and that they have old gear, not-so-old gear, and some state-of-the-art gear," Perot said. He said the Pentagon "wants to see how the architecture is being put together" in the EDS-AT&T system.
A Pentagon spokesman was unable to confirm that the Defense Department is interested in the telecommunications system.
Perot's remarks were made at the 68th annual meeting of the National Automobile Dealers Association, a McLean-based organization that represents about 20,000 foreign-car and domestic auto dealers nationwide.
Perot's comments marked the first time since EDS' acquisition by GM that he has detailed the computer company's functions within the auto maker's global empire. He said his company's primary contribution to GM "will be in the electronics and computer areas." But Perot said those fields will allow EDS to grow dramatically, particularly in the Washington area, where EDS is a major government contractor.
GM President James F. MacDonald said the auto maker wants to triple its defense contracting business, which accounted for $827 million, or 1.5 percent of GM's $74.6 billion in sales in 1983. GM's defense business has never gone above 3 percent of the company's earnings, which indicates that GM has not taken full advantage of its resources in that area, according to GM officials interviewed here.
MacDonald said EDS will be GM's lead company in securing defense and other government contracts. "One thing that we are trying to do with EDS is to keep them an arm's length company, even though they are a GM subsidiary," he said.
On another subject, Perot said that it would be "premature" to report that GM will take advantage of EDS's expertise in health insurance administration to move aggressively into the health provider industry.
However, Perot said EDS will concentrate its energies on reducing the auto maker's annual $2.2 billion health insurance costs, affecting 2.2 million health insurance bills covering 2.1 million people.
He said EDS can substantially reduce GM's health costs without affecting the quality of health care now delivered to the company's employes, retirees, and surviving family members.
EDS began in 1962 with three employes, including Perot. Before its merger with GM, the company had about 20,000 employes worldwide. GM has since transferred about 8,000 more employes to EDS, Perot said.
In the Washington area, EDS had three employes as of six years ago. Today, the company employs 5,500 Washington-area workers, whose activities account for 40 percent of EDS' $786.1 million in annual sales.
Perot said his company intends to hire 6,000 more workers across the country, about 4,000 of whom will work on GM projects.