Apple Supplier Shutting Down, 727 Employees Laid Off

CommanderFrank

CommanderFrank

Cat Can't Scratch It
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Messages
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Apple giveth and Apple taketh away. Citing the inability to meet Apple’s quota of Sapphire crystal smartphone displays, Apple has withheld a $139 Million dollar payment to GT Advanced Technologies which sent to company into bankruptcy and causing the layoff of over 700 employees, according to AzCentral.

GTAT first filed for bankruptcy after it was revealed that the company had not been able to meet Apple’s demand for sapphire crystal smartphone displays to be used in the recently-released iPhone 6 and 6 Plus.
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Hopefully it's a top-down style layoff, as an inability to produce the promised product is almost certainly management's blunder, not the line workers.
 
arnemetis said:
Hopefully it's a top-down style layoff, as an inability to produce the promised product is almost certainly management's blunder, not the line workers.
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Those aren't called layoffs, those are called "restructurings."
 
There's the leftist thinking: if a business fails, it must be because of the bigger corporations. They aren't responsible for mismanagement or promises they made and could not keep.
 
You make a commitment you should meet it ... companies get too aggressive in their contractual commitments sometimes and then think they can wiggle out of things ... I had a supplier in a two way bid for a project one time that made an extremely aggressive bid that put them in the lead ... I asked the supplier to verify they were comfortable with that bid (knowing my employer used very comprehensive penalty clauses) ... they confirmed, were awarded the contract, failed to meet the terms completely, and incurred the wrath of my employer for a year and a half ... if you make a commitment you should be able to honor it and not go whining about the penalties if you fail to deliver what you promised ;)
 
As much as I dislike Apple and take joy in bashing them when they deserve it I can't fault them in this. Why pay for something you're not going to get in the quantity you need it in? GTAT failed to deliver as promised and they're paying the ultimate price. Sucks balls for the 700+ people affected by this but, sadly, it's a dog eat dog world out there and these things happen.
 
"Prior to the announcement, the CEO of GT Advanced Technologies unloaded millions in stock"

I love that quote... While in some cases larger corporations throw their buying power around and can throttle their suppliers.

This has hints that Apple was getting scammed by the company basically. Sounds very similar to construction cons where a builder tries to get by the cheapest and slimmest measures to get the next check until finally their toothpick framework blows up with unpaid employees shotty work (due to non-skilled workers doing their best).

The CEO was pushing his company as fast and far as it could without investing much, knowing eventually they will fail...but cashing each check along the way... then selling their stock before it hit the shitter.

I really hope he is brought up on charges.
 
Does suck for those 700+ people, but the company shouldn't have oversold themselves and should have also kept money in reserve. With such a small margin for error, this was an inevitability. If not with Apple, then a different company.
 
dandirk said:
This has hints that Apple was getting scammed by the company basically. Sounds very similar to construction cons where a builder tries to get by the cheapest and slimmest measures to get the next check until finally their toothpick framework blows up with unpaid employees shotty work (due to non-skilled workers doing their best).

The CEO was pushing his company as fast and far as it could without investing much, knowing eventually they will fail...but cashing each check along the way... then selling their stock before it hit the shitter.

I really hope he is brought up on charges.
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Pretty much most/all homes built in the last 20 some years are done this way. Subcontractors who agree to such low bids that they have to cut measures including unskilled labor and swapping out materials / cutting corners.

I recently had a run in with Richmond America Homes because they failed to flash a 90 degree properly which allows water to penetrate the house between floors. It's prevalent on all their houses of this design .. Their reply? It's designed to code and the homeowner should maintain this. BTW, the gap is 1/4"+ and they want you to seal this with caulk where water will sit.

I don't fault Apple for their actions.
 
Remember people, keep a rainy day fund. Companies need to do the same - you just dont know when shit is going to hit the fan!
 
Igroock said:
Remember people, keep a rainy day fund. Companies need to do the same - you just dont know when shit is going to hit the fan!
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You cant keep a rainy day fund big enough to deal with a major penalty when you were trying to grow your company overly fast by jumping into a new market like this. You just have to take risks and see where it takes you. It would have been much easier to simply make sure when you signed the contracts you didn't have a penalty clause that large or get rid of it altogether. But they may not have been in a spot to negotiate because they may have been largely funding the expansion of the production lines by apples pre payments.

As I said in another post about this issue what we have here is simple conflicts of interest there is no way to solve this problem other than letting it happen. Either sapphire isn't all they cracked it up to be and those workers need to be layed off anyway or sapphire is still good and just needs time and GT execs wont cave into apple buyout offers.
 
I called it two weeks ago. I quote myself "My theory is that the iPhone 6 was planned to have a sapphire display but right before release an issue was found that changed things. I don't think GT made that much investment just for applewatch sapphire production."
 
xX_Jack_Carver_Xx said:
Apple Computer, undermining Made in America since 1982.
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I'll await your rebuttal....

D3S_0611-bottom.jpg
 
Who wants to be Apple turns around and buys the company in bankruptcy for pennies on the dollar? Which could have been the reason for withholding payment in the first place.
 
madmat said:
Assembled in the U.S. does not equate made in the U.S., look it up.
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Hardly anything is made in the USA anymore. It is so much more expensive to do almost everything here. How much of Samsung stuff is made in the USA? Lenovo? Microsoft? Nike?
Btw you heard it here first, iShoes.
 
DarkStar_WNY said:
Who wants to be Apple turns around and buys the company in bankruptcy for pennies on the dollar? Which could have been the reason for withholding payment in the first place.
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I don't think it is anywhere near that nefarious ... This appears to be an overly zealous supplier with a profiteering CEO who made commitments they couldn't keep ... Was Apple supposed to treat them like a kindergartener and give them a ribbon for participating or like a business and withhold payments for failure to perform and breach of contract ;)
 
Bling said:
Hardly anything is made in the USA anymore. It is so much more expensive to do almost everything here. How much of Samsung stuff is made in the USA? Lenovo? Microsoft? Nike?
Btw you heard it here first, iShoes.
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Hopefully M$ makes their software here although I'm beginning to suspect that the patches are farmed out.

I'm in full agreement about there being few things made here anymore. Part of the blame goes to the corporate ideals that they're no longer selling a product but rather a service in that they're beholden to their stockholders first and foremost and have to use every means necessary to maximize profits and the rest goes to the consumers who are only interested in getting the most they can get for the least money. If people were more interested in having a few outstanding toys rather than having as many mundane toys as their peers or as corporate America says they must have, there wouldn't be a need for stuff made in the cheapest markets.
 
Bling said:
Hardly anything is made in the USA anymore. It is so much more expensive to do almost everything here. How much of Samsung stuff is made in the USA? Lenovo? Microsoft? Nike?
Btw you heard it here first, iShoes.
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It isn't just expensive, it is more difficult ... foreign countries have much more friendly laws for business than we do ... we have few free trade zones in the USA ... we have few industrial zones for large scale manufacturing ... local regulations often result in a NIMBY factor for business (people want the job but not always the business offering the job) ... if we made a concerted effort to win back business through specialized free trade zones with the infrastructure to support high tech manufacturing we could probably win some business back ;)
 
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