We’re getting an inside look at the way Apple negotiates with its suppliers, thanks to a bankruptcy filing.
GT Advanced Technologies (GTAT) has gone bankrupt, and it’s blaming Apple for the bankruptcy.
During the bankruptcy filings, GTAT’s COO told the story from GTAT’s side of what it was like to deal with Apple. It doesn’t sound good:
GTAT incurred losses — resulting in the current liquidity crisis — due to Apple’s inordinate control over GTAT’s liquidity, operations (including control over product specifications), and decision making.
With a classic bait-and-switch strategy, Apple presented GTAT with an onerous and massively one-sided deal in the fall of 2o13.
When GTAT’s management expressed obvious concerns to Apple regarding the deal terms during contract negotiations, Apple responded that similar terms are required for other Apple suppliers and GTAT should: “Put on your big boy pants and accept the agreement.”
In a separate court document filed by Apple, the company said, “The [Squiller declaration] contained numerous statements about Apple that Apple believes to be untrue, irrelevant, and inflammatory.”
Apple added that, “Much of the Supplemental Squiller Declaration goes far beyond what was reasonably necessary to describe the Debtors’ current financial situation and instead includes gratuitous characterizations of Apple’s motives, negotiating tactics, and business practices.”
Now, this is only one side of the story. And, doing business is often nasty. We’ve reached out to Apple for comment and will update this if we hear back.