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GT Advanced COO: Apple Told Us 'Put On Your Big Boy Pants and Accept the Agreement'

So, GT entered into the deal, even when it wasn't at all favorable to them AND after Apple said "don't try to negotiate". And they took Apple's word and didn't even try?
Man, I need to do business with the guys that headed up this company. I can just walk in and say "Here's the deal. Take it or leave it. don't even try and negotiate." And apparently, they'll just take it.
Win/win for me.
 
Lefty21 said:
Apple: "I am altering the deal. Pray I don't alter it any further."
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but they didnt. that is the best part. Apple didn't change a thing. GT over promised and under delivered and perhaps tried to get Apple to alter things and was rejected. And now they are trying to get out of trouble by claiming the rules of play were unfair

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Darrin Bell said:
Hadn't they ever heard "don't put all your eggs in one basket?" I'm about as far from the corporate world as you can get, so forgive me if this sounds simplistic: but isn't it unwise to limit yourself to one customer, no matter what they're offering you, unless they purchase your company?
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Apple wouldnt let them have more than one customer. At least not for the factor that was built with Apple's money. GT agreed to this.
 
Buckmadr said:
Okay, let me get this right.. GT was provided capital, equipment (specified by GT) and the location (rent free).... GT and Apple also agreed to the engineering specifications, schedules, quality specifications and other engineering docs as well a slew of other documents stating clearly what Apple (the customer) expected from GT (the source) to provide. and in the end GT found this to be to large of a deal. It is a old story, GT's management and engineering staff overstated its capabilities and agreed to a big money ticket that they couldn't provide. When Apple wanted deliveries that GT promised, GT couldn't deliver and Apple not wanting to waste money stepped in to help correct the errors. Then it would seem that GT needed "Modifications to the equipment" that they (GT) sourced and Apple said no. Seems like business to me. Quit your bitching and move along. Your company may have been able to supple small amounts of this glass but in reality there was no way you could have ever produced the quality and quantity of glass that was needed in the time that it agreed to. This is just my humble opinion (with 25 years in the Aerospace field in Logistics working with sub-contractors and suppliers).
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25 years of experience from my manufacturing industry confirms your experience. (Always aim to undersell and over deliver and your growth, profits and sound sleep will be assured.)
 
knemonic said:
I'm sure this happens all the time. Apple saw them as a tech that if they couldn't have it, no one should, used their stance to lure them into a deal, if they could pull it off, apple wins, if they couldn't, no one wins, meaning Apple still wins.

The point is the ceo and such of gt weren't smart enough to see this up front and put themselves in this position and were lured in by the amount of money Apple offered.

The point: if something is to good to be true, it probably is. Lessened learned, move on gt.
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You're forgetting the fact that they are the supplier in this relationship. In reality the contract stipulating quality & output levels as qualifiers - is completely standard in any supply-chain/BoM contract.

Secondly, they were the contractor that sold Apple that they had viable product and were able to execute. Although with financial assistance in the form as loans - to produce said product at scale.

When the company is running low on cash - but the company owned net positive assets - this was a free cash-flow problem where management failed to keep sufficient & liquid cash on-hand to pay its bills. Free cash-flow problems are always a management error.

When management saw that free cash-flows declined early-on they failed to take basic corrective steps - any company would take (or even any household family would take).


Lastly, since when does a supplier or separate corporate entity expect/demand another company for financial assistance? This doesn't make sense at all.


The contractual terms stipulating KPI's & qualifiers is completely standard and nothing out of the ordinary at all in supply chain management.

However, the only agreement that was unique for Apple & GTA in this business relationship was the NDA requirement. However, being that Apple is technology company with a significant amount of trade secrets.
 
yablochnik said:
Yeah, we all know Apple I tough to do business with given their size and power, but GT's officials sound more and more like a kid who is complaining to his mum about a bully in school.
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its not even a bully. Its more like the kid that signed up to take a class knowing from day one how much homework there was, how many tests, and then when he fails the class cause he didn't do the work trying to get the grade cancelled because the teacher gave them too much work

I took a lot of AP classes in high school. worked a job to save up for the tests etc. I remember my AP European History class was intense. The teacher told us on day one that since the point of the class was to be a college equivlant that was what it was going to be. a college class. with college level readings and assignments. Gave us the details on day one and said we had to bring back the last page signed by us and our parents the next day to stay in the class. I'm sure at least one special snowflake that didn't pass the class had Mommy or Daddy try to get the grade changed because it was too much work. likely some lazy school athlete type that didn't want a D or F stopping him from playing college ball
 
Don't know enough about business to comment on the details. But it sounds like GTA took a chance themselves and lost.

The CEO seems like he was able to dump his shares for profit before it went down. That's not shady at all...
 
charlituna said:
but they didnt. that is the best part. Apple didn't change a thing. GT over promised and under delivered and perhaps tried to get Apple to alter things and was rejected. And now they are trying to get out of trouble by claiming the rules of play were unfair
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Uhh, but Apple did change the agreement.

He says that Apple initially drew GT in with the promise of a huge deal, originally agreeing to purchase sapphire furnaces and let GT operate them, but eventually demanding a "fundamentally different deal" requiring GT to purchase the furnaces itself.

GT gave into Apple's new terms because it had "invested months negotiating a sale contract with Apple while being effectively locked out of pursuing other opportunities with Apple's competitors." During "extensive and all-consuming" negotiations with Apple, GT ceased speaking to other companies about its furnaces due to the lure of Apple's large offer.
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Robert.Walter said:
25 years of experience from my manufacturing industry confirms your experience. (Always aim to undersell and over deliver and your growth, profits and sound sleep will be assured.)
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Well said... Too bad most people commenting here to defend GT are people who work 9to5 with 0 business experience or business sense...
 
FriednTested said:
And you are sure of that based on the word of a COO who cashed himself out and screwed his employees before the **** hit the fan... Interesting...
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I have no reason to believe that he would lie on a court document, because doing so would lead to a perjury charge.
 
cashxx said:
So the CEO, COO or whoever doesn't know how to negotiate! Sounds like they shouldn't have been in that position and never have that title again if they can't handle it.
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The issue is that there was no room for negotiating. Apple doenst work like that. THey agreed to write a check but only for X terms. the decision was take it or leave it. GT took it. They say becuse they had no other options but they choose not to talk to anyone else while they were talking to Apple and haven't proven that Apple blocked them from looking for other deals
 
Apple's side?

I would like to know what Apple's version of this story is. Because it wouldn't benefit Apple to do some of the things he is alleging. If they discovered that the equipment wouldn't produce an acceptable product, it doesn't benefit Apple to just refuse to change out equipment like that. That doesn't make any sense.

And just overall, it wouldn't benefit Apple to just say something like "Tough, try to make it work or you won't get any orders." That's just like throwing away the investment you've already made in the supplier. I have a hard time believing that's what actually happened.

Now yes, it's possible that once they got to a certain point with Apple, and had stopped talking to others, that they felt they had to go through with a contract. But I still refuse to believe that Apple wouldn't work with them to make it all come out successfully. That just wouldn't benefit either party.
 
spectrumfox said:
Uhh, but Apple did change the agreement.
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That was before they signed. Once the deal was struck there were no changes.

And in the end, had GT not failed, the second deal was actually better for them. Because then they owned the furnaces and having fulfilled their deal with Apple they could use them for other clients. Whereas before, when the deal was over, Apple could have taken the gear away. GT likely knew this little detail and was swayed to sign when they were still free to walk away
 
Hmm I don't see other Apple suppliers complaining. In fact GTAT is the only US company complaining period. Pretty sure the other suppliers are making boatloads because of getting such huge volume business. More GTAT is that guy in the office that talks a good game but when it comes to actually doing work. He fails.
 
You know - it's easy to judge GT. However - business is sometimes about taking risks. Bold risks. Even Apple took a HUGE risk with the iPod and iPhone. And if they hadn't - who knows if Apple would still exist right now.

No - they weren't forced to sign a contract. But it does sound like there were some decent terms and that GT was in a holding pattern long enough that when the final deal was presented, it was likely "easier" to take the risk then start new negotiations with another vendor which could keep them without a contract for X number of months - if any vendor was actually interested.

I don't excuse any behavior CXO's engaged in to get out while they could. But I can at least look at this and see that it was simply a bad business decision. And BOTH parties took a hit and both companies seem to be at fault for the end result.
 
mercuryjones said:
So, GT stopped talking to other customers because it was part of the deal, or because the offer was just too good? Which is it, GT? You can't have it both ways.
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charlituna said:
That was before they signed. Once the deal was struck there were no changes.

And in the end, had GT not failed, the second deal was actually better for them. Because then they owned the furnaces and having fulfilled their deal with Apple they could use them for other clients. Whereas before, when the deal was over, Apple could have taken the gear away. GT likely knew this little detail and was swayed to sign when they were still free to walk away
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They weren't free to walk away though, that's the point.

If they walked away from Apple, they had no other customers to sell their product to because they spent all of their available time with Apple trying to secure the deal.

Apple knew this. That's why the deal was altered before signing. It was to corner GT so they had no choice but to sign with Apple.

People really can't see this is what happened?
 
DougTheImpaler said:
Good gravy. If this is even close to true, it looks like Apple ran these guys into the ground.
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The fact that the CEO and the COO are under investigation for insider trading leads me to conclude that there is a bit more going om than Apple "running a company into the ground. And of course as many here have already stated GT was never obliged to sign a contract. They could have walked away if they thought they wouldn't be able to fulfill the requirements.
 
spectrumfox said:
They weren't free to walk away though, that's the point.

If they walked away from Apple, they had no other customers because they spent all of their available time with Apple.

Apple knew this. That's why the deal was altered before signing. It was to corner GT so they had no choice but to sign with Apple.

People really can't see this is what happened?
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Your kidding, right?:confused:
 
Squiller alleges that when GT execs balked at the terms, Apple said "Put on your big boy pants and accept the agreement."
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When they pulled on their 'big boy' trousers, why didn't they refuse the terms?
 
peterdevries said:
The fact that the CEO and the COO are under investigation for insider trading leads me to conclude that there is a bit more going om than Apple "running a company into the ground. And of course as many here have already stated GT was never obliged to sign a contract. They could have walked away if they thought they wouldn't be able to fulfill the requirements.
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What the CEO and COO did AFTER is irrelevant to how the deal was made and what happened as a result. I don't excuse their behavior. But unless you can prove that before they signed the contract, they had this whole plan schemed, you're just putting on a shiny tin foil hat.

rsocal said:
Your kidding, right?:confused:
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Why would he be kidding. Can you not read the article and understand it?
 
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