"You lease your car, your phone and business equipment, why not rent your office furniture, too?" a popular Detroit-area radio advertisement asks. Instead of spending precious cash on office furniture, the radio protagonist rents it, and then plans to blow all the money he's saved on new cars for his salespeople and beautifully framed portraits of himself in every office.

It's an amusing ad, but it makes a strong point to cash-strapped companies everywhere trying to make the most of limited resources.

Electronic Data Systems Corp.'s Unigraphics Div. is posing a similar question to automotive suppliers with its Venus rental program: Why not rent your computer-aided-design/ manufacturing/engineering (CAD/CAM/CAE) system?

Why not, indeed. Office chairs cost a few hundred dollars, but typical computer engineering workstation "seats" cost $20,000 or more, and even small automotive jobs usually require at least two seats. What's more, automaker contracts often only last a year -- not much time to recoup big technology investments.

 Like furniture rentals, vehicle leasing, and other alternatives to more conventional financing, analysts say the Venus program isn't for everyone, but it may help some suppliers cope better with the fast pace of technology and the short-term nature of many automotive contracts. Or it might give them a chance to bid on a piece of General Motors Corp. business they might have passed on before.

For instance, a supplier eager to bid on a GM project but short on GM-compatible engineering hardware and software and reluctant to commit up front with something ambitious could rent an entire Unigraphics turnkey CAE system, complete with the latest hardware, software, training and technical support, and build the cost of the rental into its bid.

Lisa Tomlinson, an industry analyst with Daratech Inc., a market research and technology assessment firm based in Cambridge, MA, says programs like Venus won't replace current financing or licensing methods, but says it shows CAE vendors are being creative in developing new ways for their customers -- particularly smaller ones -- to finance complex and expensive technology and manage risk better. "It's an excellent way to provide more flexibility," she says.

As automakers shift more and more engineering work to first-tier suppliers, those companies in turn are sending more engineering assignments to sub-suppliers farther down the food chain. The cost of the software, hardware and training required to do much of this engineering work is stretching the resources of many companies beyond their limits.

Furthermore, each automaker has its own computer engineering systems, software, and vendors that are not compatible. GM uses a system developed by the Unigraphics Div. of EDS, Chrysler Corp. has standardized on a CATIA system, Ford Motor Co. is using a new system created by Structural Dynamics Research Corp. (SDRC).

That means a company wishing to do business with the U.S. Big Three and Asian and European automakers -- or their suppliers -- could easily have to invest in more than a dozen seats just to be able to bid on small projects -- or might have to ignore some potential customers completely.

Tom Wellinger, an area manager for Unigraphics, adds that just as leasing a vehicle allows you to afford more vehicle for the money, renting CAE hardware and software allows a supplier to afford more seats, technical support and a higher level of software. "We give a supplier with a Venus seat all the software necessary to assure GM compliance. That could be $100,000 worth of software." Rental agreements typically are on 12-, 24- or 36-month terms.

Jeffrey McNamara, president of J.S. McNamara, a Warren, MI, company that specializes in mechanical design engineering and processing, has been involved with the Venus program for several years and currently is renting 66 seats. "It's a cost advantage to us and our customers," he says. The lower overhead afforded by renting has allowed him to drop his hourly billing rate to GM's Lansing Automotive Div. by $3 per hour, he says.

Unigraphics' Mr. Wellinger says renting helps suppliers avoid hardware obsolescence, and the technical support that comes along with the rental agreement assures successful implementation. Plus, 100% compliance with GM's latest software is guaranteed -- no small issue given the pace of change in computer software.

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