Gigaom:
Since GT Advanced Technologies declared bankruptcy in early October, the vast majority of documents detailing its deal with Apple to supply sapphire crystal have been under seal.
On Tuesday, Judge Henry Boroff issued an order unsealing an statement signed by GTAT CEO Daniel Squiller as well as its attached documents, which include details on the reasons GTAT filed for bankruptcy and its business relationship with Apple, its largest creditor. On Friday, the Squiller statement entered the public record.
There’s never been any doubt that Apple plays hard ball with its suppliers. I’ve spoken to many companies who have to deal with the company and the stories all have one thing in common – you don’t negotiate with Apple. They dictate the terms to you.
That sounds like Walmart, not to mention Intel and Microsoft in their heydays. At some point, the roadkills add up. But that’s business. No reason to expect Apple to be think different in this respect.
I’ve seen a lot of stories of the same things. Especially the exclusive deals. Tim Cook was renowned for those when he was the COO. He’d work out deals for Apple to get first access and exclusive access to all sorts of things, sometimes before they were even publicly acknowledged as existing. I can’t believe GT didn’t know these things before they started working with Apple on a deal.
And I doubt that anyone at Apple actually said that quote. Sure they might have said ‘take it or leave it’ but not that phrasing. Or that they demanded, as some articles imply, that GT couldn’t be working on other possible contracts at the same time they were talking to Apple.
Could be worse. “I am altering the deal. Pray I don’t alter it any further.”
Well, the common theme of the stories has been that Apple says they don’t negotiate, and companies don’t. But we haven’t heard that of a company trying reasonable negotiations and been refused.
Refusing to negotiate at all is just planning for the other guy to fail. Nobody sensible does that, and Tim Cook is certainly sensible.
Poor GTAT management…they never had any choice right? /s
Negotiation Rule #1: Say you don’t negotiate.
Negotiation Rule #2: Negotiate terms that are best for you.
Negotiation Rule #3: If you negotiate a deal you can’t fulfill, DON’T AGREE TO IT!
If those fail, http://youtu.be/snRvmi8kelQ
Pardon my naïveté, but did GTAT not have the option to say “no” in the first place? Is Squiller saying he agreed to a contract that he didn’t understand the terms of?
The article says, “Apple told GTAT that its terms are standard for other Apple suppliers and that GTAT should “put on your big boy pants and accept the agreement.”
Sounds like a quote of someone from Apple.
Think about how many suppliers Apple has. I would bet thousands in their supply chain. Would it really be smart for a company on the scale of Apple (e.g. the iPhone business is bigger than Microsoft) to negotiate with every single supplier?
If this was an Asian supplier then they would have put on their big boy pants and done the job. That is why deep manufacturing expertise has left the US.
Deep expertise has left the US because American business-school culture now turns out predators and vultures who’d rather cannibalize a business than build it up.
It takes expertise, care, and patience to actually create something that has value, but much less effort to take it apart, sell the pieces, and then shed public tears about how indolent the resulting unemployed workers have become. One recent presidential candidate made his fortune doing the latter.
He must’ve saw $$$$ flashing in front of his eyes. Big numbers. His ‘legal-eagles’ were not doing their job then.
Sure it sounds like a quote but it is a third party article written by someone who wasnt present based off a statement by a biased party who has every reason to want to make Apple look like assholes and may have phrased his comments which such a tone.
Unless you were party to the conversation or have a video of someone actually saying those exact words we cant say its a fact they were said exactly like that. Just that the COO of a failed Apple partner who is now in bankruptcy and has previously tried to paint Apple as villians claims someone said exactly that (interesting that there is no name dropping of exactly who said it)
Sorry but refusing to negotiate is completely what Apple and Tim Cook have done for years. Its how Tim built up Apple’s supply lines.
There are numerous stories of this over the years. Stories of the whole ‘serve only us’ or ‘serve us first’ attitudes, of Apple going to other suppliers when someone failed to meet Apple quality. even tales of those ‘quality programs’ being funded by the supplier but it was deemed that they failed to produce an item of lasting quality to Apple’s satisfaction. And all these things were in the terms from the start and it was “sign or walk” in Apple’s view. Because first and foremost they protect themselves.
It’s interesting that you think I was talking about the workers and not the leadership within the companies. NUMMI is a better example of what works.
I was talking about both.
There’s still a ton of manufacturing expertise in the US. They just provide it to Asian manufacturers that can do it with standards that we would find unconscionable in the US. None of those manufacturers would be able to come within a country mile of OSHA or EPA regulations.
You’re basically arguing that iPhones and Macs are unsconscionable crap?
This seems to be normal for big companies over the last few decades. In addition to Apple and Walmart, I have heard stories about Intel, Amazon and Oracle about poor treatment of vendors and partners.
It says nothing about the quality, but if you think that Foxconn’s or Pegatron’s work conditions or environmental impact would fly in the US or Europe, you’re deluding yourself to sleep better at night. This isn’t just an Apple thing, but also true of Samsung as well. That’s why manufacturing has moved overseas.
Sorry, but that’s completely bullshit. I’ve dealt with several “we never negotiate” companies. In one case, they stopped to demand that we demand better terms.
It never makes sense to set up a partnership for failure, which is why Cook wouldn’t do it. Yes, of course they want the best possible terms. But they also don’t want you to fail, because if you do they’ve thrown (in this case) a half billion dollars in with nothing to show for it. And that’s just dumb. Unless you honestly think Cook got where he is by being dumb.