GT Advanced Technologies Inc (OTCMKTS:GTATQ)’s bankruptcy filing last month stocked the Wall Street. The Merrimack-based company said that it had no other option but to file for bankruptcy after a deal with Apple Inc. (NASDAQ:AAPL) collapsed. GT Advanced Technologies had entered an agreement with the iPhone maker to supply sapphire for its devices.
What’s the most significant lesson from the crisis?
GTAT COO Daniel Squiller had accused Apple of adopting a “bait and switch” strategy. On the other hand, the Cupertino-company said that it lost $439 million on the deal, but got no sapphire material in return. GT Advanced Technologies’ bankruptcy filings have been made public. Communications consultant Andrew Hennigan told The Wall Street Journal that Apple talking very little about the issue was the “most significant lesson.”
Outside GT Advanced Technologies’ bankruptcy filings, Apple probably deliberately chose not to speak much. There were several stakeholders with different interests. Hennigan believes public announcements from Apple might have done very little to alter the opinions of any of the stakeholders. By choosing to limit its comments, the company avoided fueling the whole GTAT story.
Apple didn’t enter a public debate with GT Advanced Technologies
There have been concerns that “defamatory statements” about the way the iPhone maker treats its suppliers would weaken Apple’s position while dealing with suppliers in the future. Hennigan said that suppliers to large corporations such as Apple already know that such giants are tough negotiators. However, suppliers will be more cautious in the future when dealing with Apple.
Listen Logic chairman Vincent Schiavone says that Apple’s lack of openness to the press and its “buttoned-up” approach serve it well in times of crisis. The tech giant did the right thing by not entering a public argument with GT Advanced Technologies. Engaging in a debate would have given the accusation credence. Instead, Apple let the facts do the talking. As it turned out, disclosure of facts and court filings were in favor of Cupertino.
GT Advanced Technologies shares have tumbled 95.63% since the company’s bankruptcy filing.
