Yes, this came straight to my mind too! Well actually, it was this line for me:
https://www.youtube.com/watch?v=BAVxqNQos2I
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GT Advanced COO: Apple Told Us 'Put On Your Big Boy Pants and Accept the Agreement'
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Yes, this came straight to my mind too! Well actually, it was this line for me:
https://www.youtube.com/watch?v=BAVxqNQos2I
I'd like to hear Apple's side of the story. The idea that Apple "refused to permit equipment changes that would allow the company to produce an acceptable product", sounds suspicious or only part of the story. Why would Apple try to stop GTAT from making an acceptable product for Apple?
If anyone wants an acceptable product it's Apple... My guess is that the changes would not make an acceptable product - there's always engineering trade-offs. If it was a win-win scenario, the proposed equipment changes would be made without challenge from either party. Of course it's just guesswork because we don't have all the info.
Squiller accuses Apple of "embedding" itself in GT's operations...
This sounds like Apple (or any manufacturer who has high standards) that has been burnt by suppliers taking short cuts to meet production quotas.
China was/is notorious for this - where US companies would have to send engineers to the factories to make sure things were done right.
In this case it sounds like GTAT, who has knowledge to make their advanced products, is new to making in large quantities and Apple would intervene to make sure quality wasn't compromised to meet deadlines. Once again, it's also in Apple's interest to make sure done right... otherwise we'd be all crying Sapphire-gate when defects start appearing.
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If anyone wants an acceptable product it's Apple... My guess is that the changes would not make an acceptable product - there's always engineering trade-offs. If it was a win-win scenario, the proposed equipment changes would be made without challenge from either party. Of course it's just guesswork because we don't have all the info.
Squiller accuses Apple of "embedding" itself in GT's operations...
This sounds like Apple (or any manufacturer who has high standards) that has been burnt by suppliers taking short cuts to meet production quotas.
China was/is notorious for this - where US companies would have to send engineers to the factories to make sure things were done right.
In this case it sounds like GTAT, who has knowledge to make their advanced products, is new to making in large quantities and Apple would intervene to make sure quality wasn't compromised to meet deadlines. Once again, it's also in Apple's interest to make sure done right... otherwise we'd be all crying Sapphire-gate when defects start appearing.
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Apple is the one who needs to put on the big boy pants
Apple has simply become accustomed to pushing around their foreign suppliers.
Now when someone dares talk back to Apple saying "Look, we are grateful for this opportunity, and we have shown that, but you are trying to control every facet of how we manufacture something to some absurd level. Thats fine, but you are going to have to pay for it to be fair, not to mention we've bent over backwards for you. We can't just magically pull off these technical and financial miracles without funding, and still abide by morals and ethics towards our internal stake holders, so we have no choice but to bankrupt." And then Apple like a stubborn spoiled child throws a tantrum, and withholds payment.
It's getting visibly worse under business-minded Timmy's poor decision making skills, despite his publicity trips to the Asian factories, among other publicity stunts.
Good on GT for remaining ethical.
Apple has simply become accustomed to pushing around their foreign suppliers.
Now when someone dares talk back to Apple saying "Look, we are grateful for this opportunity, and we have shown that, but you are trying to control every facet of how we manufacture something to some absurd level. Thats fine, but you are going to have to pay for it to be fair, not to mention we've bent over backwards for you. We can't just magically pull off these technical and financial miracles without funding, and still abide by morals and ethics towards our internal stake holders, so we have no choice but to bankrupt." And then Apple like a stubborn spoiled child throws a tantrum, and withholds payment.
It's getting visibly worse under business-minded Timmy's poor decision making skills, despite his publicity trips to the Asian factories, among other publicity stunts.
Good on GT for remaining ethical.
I'm not a big fan of mega corps pushing the small guys around, but in the end, GT Advanced's board made a bet, and they lost.
Right... Then don't take the money, don't live rent free, don't sign the contract... The Execs are the only ones who didn't lose big and your calling those slime buckets ethical? They were saying all is fine in a call to investors days for filing bankruptcy and just as their stock was about to be sold!!!
The C level team set the sale of their stocks as soon as production problem occured in February... And your calling those slimeballs ethical? You are funny.
I'm saying PERHAPS they took the contract, believing Apple would be nice, THEN Apple turned out to be a bully. Even in contracts, there used to be a certain gentleman's aspect to agreements, but I guess there is no gentleman's game anymore with companies like Apple. What you're really saying is Apple really is a bully, and no longer about the product, as we all secretly suspect.
Also, no need to name call. Execs at apple are somehow immune to your slimeball namecaling?
Bingo...
Let's see who are the winners and losers:
Apple: did not get it's mass produced sapphire glass and is trying recover it's loans. Loser.
GTAT employees: lost their jobs. Loser.
GTAT shareholders: lost most of their investment. Loser.
GTAT exec: dumped their stocks for millions and tanked the company. Still have their jobs. Winners.
hmmm, When I see win-lose scenarios between execs and shareholders like this it makes you wonder if the exec didn't breach their fiduciary responsibilities... especially when the CEO reports back to shareholders in their quarterly conference call the company was “very pleased” to have made the agreement to supply sapphire to Apple. (yes, after the so called bait & switch)
Ethical.
Give it a rest; nothing is "quasi-boiler plate" The only reason model forms of contracts even exist is because of the continued effort to limit the bias in customer:contractor contracts. Whether Apple used strong-arm methods or instigated a punitive contract is somewhat moot; Apple was as blind as anyone in this mess; did their great contract realise them any sapphire and realise a strong supply chain to boot? No; they ended up with nothing either. Contracts that are fair to both often mean both get both want they want [assuming both perform]; one sided contracts usually end up bad for both, as in this case. Whoever negotiated this contract on behalf of Apple needs outing. If we presume that they didn't intend to send GTAT into the ground [why would they?] and actually wanted cheap mass-produced sapphire, then they failed miserably. At best, they couldn't see until it was very late, that they were working with a company incapable of meeting their demands. Apple also wasted a fortune and more importantly wasted a lot of time and also ended up with nothing.
No YOU missed the point. GTAT never had the reins to begin with. They obviously didn't carry out due diligence otherwise they would've told apple to pound sand.
But you don't obtain 80% of the US Market Share by asking suppliers for a certain product meeting certain specifications and then allow them to later dictate back to you the terms of just how they will give it to you either. Nor will you allow your supplier to give you something dark gray in color when you clearly specified in writing via contract you wanted jet black.
You demand a certain level of performance, they agree to it and you hold their feet to the fire. Those are survival tactics in this cut-throat industry called Tech.
I deal with US Government contracts and if the service we provide doesn't meet their standards we are subject to anything from sanctions to losing the contract.
GTAT lawyered-up with Apple and signed a contract and now they are acting like children by taking the ball and running home and lying to their friends about being bullied. No so. The SEC will shed more light upon their shady activities. Even if they don't, GTAT is still acting childish.
Man-up GTAT and take some medicine from the clinic of public opinion.
And for the record, I don't own an iPhone (except for a broken 3GS) and I've never owned an Apple computer either. Just sayin.... calling the shots as I see em.
Wow, you must have read a completely different article than I did. Did Tim Cook write that for you? LOL
If Apple controlled the entire operation, I'd say Apple's just as much to blame for all those people losing their jobs as GT, maybe even more so.
Apple saying, oh we never signed anything is like the dog ate my homework excuse.
Not to mention Apple clearly didn't want these documents released, not because they're trade secrets, but because they're bad for Apple's squeaky clean image.
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Everyone gets so moral and uppity with these things--don't.
This a bankruptcy proceeding, which only means that GT thought it was favorable to try to get this contract voided or restructured. This could be because they genuinely can't meet obligations as is, or it could be calculated to allow them more leverage with Apple for a different contract, get them out of the exclusivity portion of the contract, force a buyout, or simply get better terms. Regardless, GT's lawyers have to argue that the existing contract is grossly unfair to GT, and you really can't read anything into the claims being made.
If GT is in an exclusive contract with Apple, bankruptcy is one of the few tools GT can get back some bargaining power. Sounds like Apple decided to front the costs for the equipment and something went wrong.
Now GT owes Apple liquidated damages (very dubious and hard to enforce), repayment for the furnaces, and is locked into selling their product to Apple--who doesn't have to accept what GT produces--a hard place to be indeed for GT.
This a bankruptcy proceeding, which only means that GT thought it was favorable to try to get this contract voided or restructured. This could be because they genuinely can't meet obligations as is, or it could be calculated to allow them more leverage with Apple for a different contract, get them out of the exclusivity portion of the contract, force a buyout, or simply get better terms. Regardless, GT's lawyers have to argue that the existing contract is grossly unfair to GT, and you really can't read anything into the claims being made.
If GT is in an exclusive contract with Apple, bankruptcy is one of the few tools GT can get back some bargaining power. Sounds like Apple decided to front the costs for the equipment and something went wrong.
Now GT owes Apple liquidated damages (very dubious and hard to enforce), repayment for the furnaces, and is locked into selling their product to Apple--who doesn't have to accept what GT produces--a hard place to be indeed for GT.
Sounds like a solid business deal by Apple. Why would they be under obligation to purchase the goods, if said goods did not meet the standards or came months late, thereby not allowing them to use the goods on the devices that they wanted to?
Could Apple have done things differently in order to help GTAT? Probably, but Apple didn't become Apple by making lazy and loose business deals.
GTAT is just now realizing that if you want to move up from the minors to the big leagues, you can't keep playing the same game. Although, it sounds like the execs knew this and starting playing the game, just not the with business side of things.
Since the agreement is terminated, GT can sell whatever they've got. They're just apparently not going to make any money off it in profit. I'm sure Samsung is ready to kick the tires though.
Then the execs were amateurs who had no business negotiating with companies the size of Apple.
The first part should be a given; when you're negotiating with a 800lb gorilla, don't expect them to be a docile mouse. They can and will use their market power to dominate the transaction. Same as you'd expect with Walmart, Coke, or any of the other big boys.
The second part doesn't logically follow from the first. Apple can still care about the product while pushing for the lowest costs / least risk. In fact, inserting their own people into operations would indicate the opposite of your claim.
They could have been a very big and successful company if they had big enough boules.
Seriously, the problem all came when they missed the targets for the iPhone 6. And without the deal with Apple, they didn't have a chance.
The jobs weren't there before the deal, they aren't there now net loss 0. Company was in trouble before in trouble now. SNAFU
Come on mate, I like my Apple Halo, can I just where a little longer......?
What you consider bullying is just business. In my business I deal with big insurance companies, they bully & strong arm daily. But my business gets to laugh all the way to the bank. Sometimes it's worth big money to let them "bully" you! Just perform what you said you could!
Spot on, and perfectly nails the problem with the "big boy pants" argument. Squeezing a commodity supplier until the juice drips might be a good idea (and might not). Squeezing a supplier with which you are attempting to develop a substantial technical breakthrough and possibly market-changing feature, such that the incentives drive toward "win or die" behaviour, is never a good idea. Attempting to do so was a major failure on Apple's part.
I'd go a bit farther and say that for just a few hundred million more than already flushed Apple could have purchased GT outright. Then they would have had all the control they wanted, and even if the project failed to produce (as it did) they would have had a nice high-tech product line not incompatible with their core business with a revenue cycle different from the phone business. A bit of diversification without going down the road of becoming GAF.
I guess I should be have expected even after embarrassing Apple news comes out, everyone is making excuses for Apple and throwing blame everywhere but on Apple. If this was Intel or Microsoft, everyone would be crying foul about them and blaming them directly for a tech failure even if a contractor was involved.
Here it's never Apple's fault.
Here it's never Apple's fault.
For all of Apple's supposed tough hardball playing and brilliant squeeze-contract writing they seem to have totally missed the possibility that GT could file for Chapter 11 and regain leverage that Apple thought was entirely on its own side.
And yet, for you and yours, it's always Apple's fault, right? Regardless of the circumstances?
You misunderstand. I'm postulating that GT Management knowingly and deliberately pushed ahead with the deal when they were well aware that they could not do what they promised. Apple on the other hand got good samples from GT and a well written business plan about how to scale the process up. I suspect GT knew that the process used to make small quantities of top quality sapphire would not scale up. GT Management may have knowingly pushed the falsehood in order to drive the stock price up...temporarily. Apple is not in the sapphire business so they fell for it.