Ondrej Holzman Case bankrupt supplier GT Advanced Technologies sapphire has been running for over a month. Although Apple agreed with its partner to end the cooperation, it was ultimately unable to prevent the publication of key agreements that show the style of the Californian giant's negotiations with GTAT.
A number of interesting details regarding Apple's collaboration with GT Advanced Technologies emerged in a statement from GTAT COO Daniel Squiller, which Apple claimed would damage him if made public. However, Judge Henry Boroff was adamant and the Californian company could not convince him of the real harm.
As a result, Squiller's full, unredacted statement was finally released, detailing why GTAT had to file for bankruptcy protection in early October. Squiller provided the court with unique documents describing the agreements between Apple and the supplier, which the iPhone manufacturer is traditionally very protective of. Squiller shows with these documents that the contract concluded was unsustainable for GTAT and significantly favored Apple. Everything finally culminated in the bankruptcy of GTAT.
Squiller revealed that Apple did not actually negotiate, but rather dictated the terms that he forced the GTAT representative to accept. He told them not to waste his time because Apple does not negotiate with its suppliers. GTAT was hesitant to accept the dictated terms, which Apple commented by saying that these are standard terms for its suppliers and GTAT should "put on your big boy pants and accept the agreement".
Most of Apple's suppliers are in China and the contracts are strictly confidential, so it is impossible to verify whether the deal proposed for GTAT was the same as some others, but the fact that Apple is using its power and position in a big way is practically indisputable. This is also confirmed by the just published details of the contract with GTAT. According to chief operating officer Squiller, Apple shifted all the financial risk to GT Advanced over time, which had only one result: if the collaboration worked, Apple would make a lot of money, if the collaboration failed, as it eventually did, GT Advanced in particular would take it away from the majority .
A lot of information became public already at the end of October, when it was exposed part of Squiller's testimony, and after Judge Boroff overruled Apple's objections, we now know the rest of the documents submitted. In them, Squiller describes Apple as a tough negotiator whose deadlines and expectations were impossible to meet.
For example, in the beginning Apple planned to buy the sapphire furnaces for the production of sapphire itself, but in the end it completely turned around and offered GTAT different terms: Apple would lend money to GTAT to purchase the sapphire furnaces itself. Apple subsequently restricted GTAT from trading with other technology companies, the sapphire manufacturer itself was not allowed to interfere in the production processes without Apple's consent, and GTAT also had to meet any deadlines set by the Californian giant, without being subsequently obliged to take away the manufactured sapphire.
Squiller described Apple's negotiation tactics as a classic "bait and switch" strategy, where they present favorable prospects to the supplier, but the reality is ultimately different. Squiller admitted that in the end the contract with Apple was "unfavorable and fundamentally one-sided". This is demonstrated, for example, by the fact that even if Apple did not take the sapphire from GTAT in the end, the manufacturer was still obliged to repay the borrowed money. In the end, Apple didn't even pay the last part of the loan did not send.
But the GT Advanced representatives are definitely to blame, as Squiller himself admitted. The size and prominence of Apple was so tempting for GTAT that the sapphire manufacturer eventually agreed to significantly disadvantageous terms. The potential returns were so huge that GT Advanced took a risk that ultimately proved fatal.
However, the newly published details of the cooperation will no longer have an impact on the entire case. Apple with GTAT in October he agreed on an "amicable termination" in which GTAT would repay its debt to Apple over the next four years, and finally that Squiller's public statement would not change the original agreement.
In October, GTAT requested that the now-public documents remain secret because the company faced a $50 million fine for each breach of confidentiality, which was also part of the agreements between the two firms. Apple responded with exasperation to Squirrel's extensive statement, saying that most of the information provided was definitely not necessary to make public in order to understand GTAT's current financial situation.
Apple said in a statement that Squiller's documents are intended to paint Apple in a bad light as a dictator, and in addition to harming the company, they are also false. Apple reportedly had no plans to take control and claim power over its suppliers, and publishing the aforementioned details could jeopardize its future negotiations with other suppliers.
I don't quite know what this case is about. GT simply took a risk and the risk did not pay off. It is clear that Apple will not do charity. GT should not have signed it if the risks were really that great.
totally agree!
It's about the fact that the media doesn't have much to write about and therefore they need to properly blur every event.
I find it strange too.
It's like if I took out a loan, couldn't pay it back, and then defended myself by saying that the lady on the street said I'd put it in the left rear.
I think Apple just overdid it and acted from a position of strength. This will also be a great lesson for them, as he has now gone from the sapphires to the straw
Even if it is true that GTAT took a risk and to a large extent they themselves are to blame, the question is who besides Apple lent money to GTAT. Because if only Apple, then I can get to the whole GTAT company, but the agreements between Apple and the suppliers have already been published and it can cause more damage to Apple than they gain by such a takeover of GTAT.
It is strange that the case of such a tip has been solved for quite a long time considering how stupid it actually is. Apple acted from a position of strength, yes it did, but let's translate it into normal life:
I come to the bank to borrow money because I want to buy a car. The bank lends me super money at 20% interest and I nod because I'm in a state where no one else will lend me. After a while, I get into problems with work and thus with payment, first they take my car and then, as is common in our country, the barracks.
As already written, GTAT simply took a risk and the risk did not pay off. And if the contract was written in such an extremely disadvantageous way, then they are probably paying company lawyers unnecessarily.
In our country, nobody dwells on dozens, maybe hundreds of people who lost their roof over their heads because of a bad contract and their stupidity.
You're ranting about something you have no idea about. If any of you had been to a single meeting with Apple's top management, you would probably have passed out from nerves. And if not from nerves, then certainly from the numbers. And if not even from those numbers, then definitely at the moment when you should tell them "thanks, but no". Hello