“Apple Inc. used ‘bait-and-switch’ tactics in negotiating a contract with sapphire-maker GT Advanced Technologies Inc. (GTATQ), guaranteeing itself ‘heads I win, tails you lose’ terms, a GT executive said in an unsealed court document,” Dawn McCarty and Phil Milford report for Bloomberg. “”
“Daniel Squiller, chief operating officer of GT Advanced, blamed the company’s losses on Apple, with which it had a supply agreement, in a bankruptcy court declaration,” McCarty and Milford report. “‘With a classic bait-and-switch strategy, Apple presented GTAT with an onerous and massively one-sided deal in the fall of 2013,’ the executive wrote. ‘When GTAT’s management expressed obvious concerns to Apple regarding the deal terms during the contract negotiations, Apple responded that similar terms are required for other Apple suppliers and that GTAT should ‘Put on your big boy pants and accept the agreement.””
“Apple countered that it ‘committed to put at risk up to $2 billion in connection with this project’ and that it bent over backward to work with GT Advanced,” McCarty and Milford report. “Apple made payments even when the GT Advanced failed to meet deadlines, lawyers for the computer company wrote.”
Read more in the full article here.
MacDailyNews Take: Did GT Advanced sign the deal with Apple? if so, you live and die by it, big boy pants or not.
Related article:
Court unseals GT Advanced documents: Apple says it ‘bent over backwards’ to help sapphire supplier – November 7, 2014
Daniel Squiller, Chief Boo Hoo Hoo Officer of GT Advanced Technologies, blamed the company’s losses on Apple.
They are under investigation for insider trading. . . it looks as if just days before they declared bankruptcy, someone in their upper management unloaded a bunch of shares. That is a BIG NO-NO. They are piling on smoke and mirrors trying to distract from that.
I think Squiller is suffering from transference. I’d call claiming you could accomplish something and then not delivering is the true bait & switch.
It’s all a distraction by GT to put the focus on Apple instead of the pokus on their con templated bankruptcy and who knows what other shenannigans aside from the executive’s (I play one on tv…ha)- ‘inexplicably dumb’ stock sale before the filing.
This isn’t a lawsuit and they wouldn’t have a leg to stand on if it was their defence for breach of contract, even in Lucy’s court .
They would surely sue Apple of their was any chance that Apple did something egregious …not declare bankrupcy and cry blame .
Of their = if there…
If I held a management position at GTA I would be embarrassed to produce such declarations!!
bait and switch is normally perpetrated by the seller. Not sure how it works backwards.
Really good point.
It takes one to know one… GTAT is the bait and switch performance king.
Smoke, meet mirror, as stated above.
Maybe this is what the Judge was thinking all along, maybe he is looking out for Apple’s better image. Not really sure though.
Fire GT Advanced management.
Dear bankrupt Co.:
Wipe the sand out of your man panties, dry your crocodile tears, stand up straight, chin up and manfully own your incompetence.
No one but you are to blame for your bankruptcy.
If it was so bad for them surely any management worth their pay grade would have walked away from it, unless they needed it to survive in the first place of course because one presumes the management had failed to make it a very successful company in the first place and were desperate to do so now. Of course the blame game is usually the last refuge of bad management isn’t it especially when you have so conveniently shed so much of your own stock at the right moment shortly before it all blows up in your face. Sounds like amateur night to me.
Exactly my thoughts. I mean what in the world are you doing signing a contract that you think you were pressured into or that you felt was unfair. I don’t think GT was taken advantage of by Apple, but for sake of argument, if they were trying to take advantage, why sign the contract? I don’t want Apple to give away trade secrets, but I wouldn’t mind hearing more details about this supposed bait and switch contract.
I wonder if the investors feel the same way. Since the CEO was selling the stock and letting new people buy stock. That seems a lot like bait and switch to me. Just the switch part is they paid expecting a possible profit and they were selling knowing the investors would lose value and the CEO maintain profit until the chapter 11.
This was a con job by GTAT from day one. I’ve known some of the greatest con men in the history of the world and this all looks very familiar.
Who is your favorite? Best performance? Biggest financial haul? Biggest audience conned? Best con movies of all times?
Gosh your post is loaded with ripe creative fruits, they could make a TV series out of it.
My favorite, because he was once an involuntary (on my part) business partner of mine is Richard Hirschfeld (and his partner, Robert Chastain). Hirschfeld was, for a time, Muhammad Ali’s attorney. He and Chastain were the one’s who secretly recorded meetings with Ferdinand Marcos about invading the Philippines to reclaim Marcos’ position and money. Hirschfeld once issued stock in a bank in VA without first going through the SEC. The bank then went belly up and nobody knows where several million in cash ended up.
See:
http://www.washingtonpost.com/wp-dyn/articles/A5384-2005Jan12.html
And here’s the book:
http://www.nytimes.com/2007/01/25/books/25masl.html?_r=0
If Apple’s makes a habit of screwing its suppliers you’d think we’d have at least one other instance to point to in thirty years.
Let’s see….
Step 1 tell Apple we can deliver a sought after commodity
Step 2 announce to the world we are in negotiation with Apple
Step 3 sign anything to get a deal
Step 4 announce the deal and watch the stock soar
Step 5 sell millions of $$ of your own stock to unwitting investors on the strength of the Apple deal
Step 6 BAIL
That’s entirely possible that Apple offered GT Advanced a deal that overwhelmingly favored Apple.
I wouldn’t doubt it at all.
That being said, I am also willing to bet that GT Advanced would have benefitted handsomely if they could have fulfilled it.
And that’s the heart of the issue. If GT Advanced couldn’t do so for whatever reason, they should not have signed a contract.
If they didn’t like the terms, they should have walked away.
That they didn’t tells you a lot about decision making at the company, and why Apple should isn’t to blame for them falling apart.
Sounds like GTA is implementing the “wait and bitch” technique.
“Apple responded that similar terms are required for other Apple suppliers and that GTAT should ‘Put on your big boy pants and accept the agreement.'”
“Well, maybe all the other Apple suppliers are idiots, but WE’RE not going to jump off a cliff just because everyone else does. Do you have a different proposal, or are we just wasting our time here?”
Negotiation is the art of knowing when to walk away, and the backbone to do so when it becomes necessary. GTA CEO: fail.
At least they had work to do for a while, if you look at their income statements it’s almost like they were barely even working before Apple got involved and there was actually even a complete gap in any income at all.