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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: hlpinout who wrote (88837)	1/12/2001 6:54:37 PM
From: hlpinout	Read Replies (1) \| Respond to of 97611

1/12/01 - Compaq Regional Centers Serve Custom Computers to Business Customers ONTARIO, Calif., Jan 12, 2001 (The Press-Enterprise - Knight Ridder/Tribune Business News via COMTEX) -- Tucked away among the warehouses and industrial business parks of south Ontario, Compaq Computer Corp. is quietly changing the way it does business. The world's largest personal computer maker is increasingly relying on regional assembly and distribution centers such as the one here to boost sales to large commercial clients, while consumer demand for PCs continues to fall. This 180,000-square-foot facility at 1220 Baker Ave. also serves as a prime example of the high-tech companies that have flocked to Ontario and neighboring areas in recent years, but often go unnoticed because their corporate headquarters are elsewhere. "Compaq is making a lot of inroads in the Western region," said Dayna Fried, a spokeswoman for the Houston-based company, which provided a rare look inside the Ontario plant Thursday. "And we are right here in your backyard." Known as the Compaq Direct Customization and Distribution Center, the Ontario plant assembles and ships an average of 1,200 computers a day, catering exclusively to business customers who place orders for multiple desktop computers, laptops and high-end servers. As one of just four such facilities in the United States, the Ontario site is crucial to Compaq's new campaign to reach out to businesses and reduce the amount of time it takes to fill custom orders, said David Fusco, who oversees the company's Southern California operations. "We streamlined the supply chain," Fusco said. "It was a fundamental shift in the way Compaq did business." The Ontario plant, which Compaq acquired last year, employs 225 people and there are plans to add more this year, as the company concentrates on big-business customers in the face of a precipitous decline in sales to consumers. Computers, laptops and servers are assembled in Ontario from components made in Asia. Business customers can place their orders online and expect delivery within five days, although next-day service is possible. A single computer customization takes anywhere from 15 minutes to three hours, depending on the complexity of the job. The Ontario plant has 188 automated work stations where employees assemble the units according to the customer's specifications. The most common requests include loading special software, adding more RAM, and installing DVD drives. "Basically, you get to build your own computer," said Gary Steinberg, director of manufacturing and customization in Ontario. "You choose whatever you want." In a sense, Compaq has been forced to take such measures by a rapidly contracting market for computers. Amid signs of a slowing economy and anemic holiday sales, nearly every major computer company -- including Apple, Dell, Gateway and Intel -- have warned investors that fourth quarter earnings will fall below expectations. Compaq joined the chorus on Dec. 12 when it cut fourth-quarter revenue expectations. The company said slow consumer demand would result in quarterly revenue of about $11 billion, down 10 percent from a previous forecast. On Wall Street, Compaq's stock price has plunged in recent months -- from a 52-week high of $35 a share in late summer to a low of $14.30 after the December revenue warning. The stock (NYSE:CPQ ) ended trading Thursday at $19.11, up 6 percent from the previous day's close. Compaq took over the Ontario operation last February when it bought Inacom Corp., which build the distribution center four years ago. The PC maker joins numerous other high-tech companies that have placed such facilities in the Ontario-Mira Loma area, including eToys Inc., Toysrus.com and Ritek Corp., which is building a 222,000-square-foot plant to manufacture compact discs and digital video discs. By Michael Utley To see more of The Press-Enterprise, or to subscribe to the newspaper, go to inlandempireonline.com (c) 2001, The Press-Enterprise, Riverside, Calif. Distributed by Knight Ridder/Tribune Business News. -0-