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GT Advanced COO Blames Apple's Strict Sapphire Contract Terms for Bankruptcy Filing

Keirasplace said:
The problem is that for Apple, the risk of putting the Saphire into the phones without backup would be atronomical. You act like both had the same risk? The potential losses on Apple's side of not being able to get the 6+ , 6 out would be tens of billions of dollars of profits, plus if the screen is not up to snuff, big loss of reputation and further big loss of sales and profits.

The phone already are back ordered, so you can imagine that if GTAT couldn't even manage Apple's initial expectations, that they probably couldn't manage the current heightened expectations.
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You are assuming that this was for iPhone displays. To the best of my knowledge that rumor has never been confirmed. In fact, Apple's intended use for the sapphire from GT has never been publicly confirmed.

Also, were the situation handled differently a couple of months ago, the situation now might also be different. But that we'll never know...
 
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One, I cannot imagine WTF they were thinking when they entered into that contract with Apple.

Two, my guess is they were thinking they could just pump out large quantities and Apple would have to use it. Typical American business attitude: just move the shoddy crap out the door to jack next quarter's profits. They forgot Apple are not a typical American business. :p

GTAT do not invest so much time and effort into the production process. They were already nailed for passing off faulty Sapphire furnaces to a Taiwanese manufacturer. They deserved to go belly up, but it's too bad for all the workers who will get shafted. Meanwhile the bozos who ran the company bail out with millions, because of course they earned those millions for taking all the "risk".
 
eac25 said:
You are assuming that this was for iPhone displays. To the best of my knowledge that rumor has never been confirmed. In fact, Apple's intended use for the sapphire from GT has never been publicly confirmed.

Also, were the situation handled differently a couple of months ago, the situation now might also be different. But that we'll never know...
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Well I presume it wasn't for the watch, since they wouldn't be behind schedule...like you say we'll never know
 
Jazper said:
Isn't Apple rich enough? Like seriously who creates possible fines of $300,000.
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A company that's serious about getting what they sign to pay for. It wasn't about money to Apple. It was about giving GT a good reason to get done what Apple wanted done. $300,000 to Apple is like 5 cents to us. It's literally nothing. They wanted to make sure GT had a reason to work hard to accomplish what Apple needed. That's it.
 
Typical of America, blame other for your problems. "It wasn't my fault". Who signed the agreements? Did Apple hold a gun to their heads and force them to agree to the terms?
 
Both companies were plain stupid in this case. GTAT for signing a contract that would strangle them if they couldn't comply with Apple's terms and Apple for being truly stupid for investing millions of dollars in a factory and equipment but enforcing such strict terms that they kill the company if they can't deliver.

If you're investing millions of dollars in such a project you would assume it would be beneficial for both companies if you work together. It seems to me Apple overplayed their hand and called GTAT's bluff. Now both companies lose.

This should be a lesson for both Apple and suppliers.
 
rGiskard said:
One, I cannot imagine WTF they were thinking when they entered into that contract with Apple.

Two, my guess is they were thinking they could just pump out large quantities and Apple would have to use it. Typical American business attitude: just move the shoddy crap out the door to jack next quarter's profits. They forgot Apple are not a typical American business. :p

GTAT do not invest so much time and effort into the production process. They were already nailed for passing off faulty Sapphire furnaces to a Taiwanese manufacturer. They deserved to go belly up, but it's too bad for all the workers who will get shafted. Meanwhile the bozos who ran the company bail out with millions, because of course they earned those millions for taking all the "risk".
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The better question is, what was Apple thinking?
 
theheadguy said:
I know that everyone will get on GTAT's back about this, but I respect his point. Apple has billions upon billions of dollars, they don't. GTAT took a chance, and failed. It should be respected that they tried.

This is also a loss for Apple. Obviously, Apple wanted this work done, and they wanted the expertise that GTAT had. Perhaps if Apple was not as heavy handed with the contract terms, this would have worked out for all.

It's not necessary for Apple to flex its corporate muscle all the time. Sometimes it can backfire.
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Don't take this wrong but I totally disagree. This isn't about Apple flexing muscle, it's about an arrogant CEO/COO flying by the seat of his/their pants, salivating on a big payday! With a mind set of what do I/we have to lose.
We can sell our stock, **** the employees and file BK! Then blame Apple because they wanted what they were told they would get and, oops sorry, but can we get the rest of the loan?:eek:

Again, blaming Apple for GTAT signing a contract agreement, that they could do what was being asked, or what GTAT told Apple they could do! Now making week excuses, rather then flat out saying what happened! They took a chance on a deal that did not favor them and failed!!!

Please don't try and tell me that their attorneys reading the contract didn't clearly explain to them, if in fact it's true, a very favorable deal for Apple!

That's just plain ignorance, if I'm to believe this company's CEO/COO had no idea what the deal was, then they're more ignorant and more to blame then I thought.

I'm not trying to say GTAT didn't really want to try, but please don't think for a minute they were getting that kind of money by telling Apple, oh we think we can, but don't hold back money if we don't.:eek:

And then try to make Apple look like bullies in the sandbox!
 
theheadguy said:
I know that everyone will get on GTAT's back about this, but I respect his point. Apple has billions upon billions of dollars, they don't. GTAT took a chance, and failed. It should be respected that they tried.

This is also a loss for Apple. Obviously, Apple wanted this work done, and they wanted the expertise that GTAT had. Perhaps if Apple was not as heavy handed with the contract terms, this would have worked out for all.

It's not necessary for Apple to flex its corporate muscle all the time. Sometimes it can backfire.
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What point? "We agreed to a contract that we shouldn't have and now we feel that it's mean and unfair, boo hoo"?

I mean seriously, this is business, I expect any company to be more aware of that and not agree to contracts that they can't keep. Apple is not obligated to make special allowances just because they're big. They're big because they know how to run their business and don't get in to contracts they can't keep.
 
kerrikins said:
What point? "We agreed to a contract that we shouldn't have and now we feel that it's mean and unfair, boo hoo"?

I mean seriously, this is business, I expect any company to be more aware of that and not agree to contracts that they can't keep. Apple is not obligated to make special allowances just because they're big. They're big because they know how to run their business and don't get in to contracts they can't keep.
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Exactly, blame the guy with the money, he can afford it! So ****** what! They have money by not saying, "oh well we have money, let's just rub their little heads and let them ******* us".:cool:
 
theheadguy said:
I know that everyone will get on GTAT's back about this, but I respect his point. Apple has billions upon billions of dollars, they don't. GTAT took a chance, and failed. It should be respected that they tried.

This is also a loss for Apple. Obviously, Apple wanted this work done, and they wanted the expertise that GTAT had. Perhaps if Apple was not as heavy handed with the contract terms, this would have worked out for all.

It's not necessary for Apple to flex its corporate muscle all the time. Sometimes it can backfire.
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Agreed, personally I noticed that having a supply of sapphire glasses was way too close to release. It takes a load of time to have something just perfect to mass produce into millions of units.
 
we only get port story I'm sure, but why would anyone ever sign a contract with such restriction :roll eyes:
 
Very Simple

...Daniel Squiller was way out of his league. Angry investors should go after him. Initially I thought it very well may have been Apple's never ending squeezing that did GT in. To me anyway, after reading this, Danny Boy was simply a Double A player trying to play in the Word Series. :apple:
 
I have read this and the other threads. This was "magical thinking" on Apple's part. At every point along the way Corning warned, noted, disclosed. Fact was disregarded by suspended disbelief.

Apple and GT can say oh sh**. Corning can rightly say I told you so. And cash the massive wire transfers.
 
Of course the terms put Apple in charge of everything. You don't work with a company like Apple on a product like this and expect any less.

The customer always dictates the terms in the end. A seller may dictate the price , but the customer dictates the terms at which they will buy.

In cases like this, the seller (GT) had no leverage to begin with. They were a relatively small company to begin with. If they were to even hope to meet Apple's needs, they'd need their active support and assistance--which they were given. If Apple's people were causing problems, somebody at GT needed to speak up and fix those problems.

There's two sides to every story, we'll see how this all shakes out in the end, but it sounds like somebody's really bitter about the fact that things didn't work out as planned.
 
DonutHands said:
how could anyone with half a brain agree to those absolutely crazy terms? Sure you want to get the contract but come on, negotiate out those unreasonable lines in the contract.
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They accepted the contract because Apple gave them five hundred million dollars, which they were supposed to use to build capacity to manufacture Sapphire crystal, which they would have sold to Apple for lots of money. You know, the Sapphire crystal screens that were supposed to go into the iPhone 6.
 
Apple must have had doubts about going with sapphire to create such a strict contract.

If Apple really wanted to do this they would have put much more money into this. Instead it cost them.
 
I love this site...

Yes, I will side with the greedy multibillion dollar nice company Apple

over

800 jobs for working class people down the drain that's Apple's fault.

Yeah, that makes sense. Of course Apple's always right.
This is all GT's fault for signing the contract that inevitably led to delays & mass firings that Apple allowed. But of course none of it is Apple's fault.

Keep in mind, Intel has delays all the time. They don't find a patsy and lay off 800 workers though.
 
Jazper said:
Isn't Apple rich enough? Like seriously who creates possible fines of $300,000.
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Maybe if it keeps production from starting or during production when Apple is making billions off of phones. Any delay on parts would be bad for the supply chain and apples bottom line is my guess.
 
Peace said:
Of course it was highly favorable to Apple. Apple paid for it.

If the COO of GT thought it was the strict contract why did he sign it ?
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What all you fail to consider is that Apple WANTED GT to succeed - so Apple was just as stupid as GT in this, to impose a contract that was so onerous that it led to GT's demise.
Everyone acts like GT was stupid to agree to this contact. Apple was stupid too then, because they agree to it, and didn't get what they wanted either.
 
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