GT Advanced blames Apple of Bait-and-switch Strategy while Apple says it bent over backwards

The supplier of Apple, GT Advanced has gone bankrupt.

Apple has always been rather draconian in matters of contractual agreements. But that has not led the competitors from wooing it to do business with them. Take the case of GT Advanced Technologies. The company signed a contract with Apple in 2013 according to which it was to supply sapphire crystals to the Cupertino-based giant. 

However, it went into a loss due to this deal. After a year of working in conjunction with Apple, GT Technologies went bankrupt. The two companies have settled their differences though. This case shows Apple’s ways of dealing with its partners in business. 

The CEO of GT Advanced, Daniel Squiller, blamed Apple for the troubles of his company. Many of the terms and conditions had been in Apple’s favor. There were cost overruns and expensive charges due to Apple’s demands.

“GTA’s business relationship with Apple has become unsustainable without Apple taking responsibility for cost overruns and additional expenses caused by Apple,” Squiller said in statement.

There have been no comments from Apple so far. Apple had ingratiatingly tried to work in tandem with GT Technologies. The whole scheme was just to obtain the sapphire crystals that the company made. The court arguments which are running the gamut right now have the Apple execs arguing that the GT CEO’s comments are untrue, irrelevant and defamatory. 

“Apple bent over backwards to work with [GT] — including making payments to the company notwithstanding the company’s failure to meet performance milestones — in the hope of obtaining usable, economically viable sapphire,” Apple said in its filing.

GT faces a lawsuit from those companies which have shares in it after the signing of the deal with Apple. The bond between Apple and GT was troubled right from the beginning. There were several points of disagreement between the two companies. Apple finally left GT high and dry since it did not buy the furnaces for the sapphire crystals. 

Apple was just interested in the sapphire crystals and that was about it. After months of talks it became clear that Apple was not the least bit interested in the furnaces. GT ultimately had to borrow $578 million from Apple to get its job orders completed. 

This was a losing game. Most of the evidence from GT points towards Apple as being a big, brash bully. It is a company that is used to having its own way like its late boss Steve Jobs who was a big egomaniac and flawed genius. The contracts and negotiations led to penalties that GT had to fill. 

These amounted to $640,000. So GT is right in blaming Apple since Apple virtually ruined its whole image and business. Finally, when all was said and done, GT filed for bankruptcy. This was the only way out of the conundrum.  

Source: Recode