Zenith back in Desktop V game

Zenith Data Systems Corp. will offer free upgrades to Desktop V buyers who do not
receive their new PCs within contractual time limits.

Under an agreement with the Air Force Standard Systems Group, ZDS customers will get
either bigger hard drives and more RAM or better monitors if their Desktop V orders are
not filled on time.

SSG in Montgomery, Ala., stopped processing orders on Zenith Data's contract for five
days--Sept. 9 through Sept. 13--after customers complained that the company was failing to
honor the 10-day delivery cycle stipulated for U.S. locations. Overseas orders are
supposed to be turned around in 14 days.

The new agreement, signed Sept. 14, gives ZDS extra time to fill orders--30 days in the
continental United States and 45 days to foreign sites. Kenneth Heitkamp, SSG's technical
director, said ZDS has until Nov. 15 to speed up deliveries to meet the contract

In what Heitkamp called "a consideration for the inconvenience of the
delays," Zenith Data will add storage capacity and RAM to some PCs and a
higher-resolution color display to a portable computer when orders are not filled within
the 10- or 14-day window.

Heitkamp said he could not disclose the particular products that would benefit from the
upgrades because SSG and Zenith Data were still negotiating as of last week.

He said the delays were due to production-line problems primarily caused by ZDS'
decision to transfer its manufacturing operations from St. Joseph, Mich., to Sacramento,
Calif., in July. That move followed the April acquisition of ZDS by Packard Bell
Electronics Inc. of Sacramento.

In a statement, Zenith officials described the problem as "start-up delays"
and said they were "extremely apologetic to our customers who are experiencing
delayed delivery."

The Air Force reached the agreement only after sending top SSG executives to review
Zenith's operations in Sacramento. Col. John Weimer, vice director of SSG, and Lt. Col.
Larry Sampson, the Air Force's small-computer program manager, were among the SSG
officials who flew to California in the midst of the Air Force's annual Information
Technology Conference.

The officials were walked through Zenith's entire production line, "down to
wrapping and packing," Heitkamp said, adding that the tour convinced SSG that Zenith
can meet the original delivery deadlines.

SSG had received close to 775 orders for Zenith PCs before the suspension. Orders for
units from Hughes Data Systems Corp., the other Desktop V contractor, were running around
40 percent of that number but may have spiked slightly during the five days when Zenith
orders were on hold, Heitkamp said.

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