Apple is a pretty secretive company, so when its sapphire provider GT Advanced Technologies filed for bankruptcy last month it was a rare public stumble for the Cupertino company. At the time we weren’t exactly sure what to think of the entire ordeal, but a new behind the scenes report from The Wall Street Journal reveals that the Apple-GT deal was an even bigger mess than we ever imagined.
From the very start, Apple’s plans to produce synthetic sapphire glass in bulk may have been flawed. It turns out that GT didn’t have any prior experience manufacturing the material. The company did have a plan to build massive furnaces that could churn out huge sapphire cylinders, called boules, twice as big as the industry standard, but the first test run produced a boule so shattered it was completely unusable. Apple still signed a deal a few days later, but things didn’t get much better.
GT reportedly went on a hiring spree, bringing in hundreds of new employees with no clear direction. Some spent hours cleaning the same floors with unlimited overtime, while others never even showed up thanks to a non-existent attendance policy. At the same time, about half of the boules produced by GT were still unusable. Other issues included power outages at the Arizona factory and regular changes to the specifications Apple required. GT also spent $900 million—more than twice what Apple had loaned it—just to get the factory working. When the smaller company finally declared bankruptcy it was in the process of working out a new deal with Apple, but instead silently pulled the trigger before sharing the news with Cupertino just 20 minutes later.
At the end of the day, the two companies still don’t agree on what went wrong. In a private letter to GT creditors shared with the WSJ, Apple blames GT management for the entire thing. “We never wavered from our commitment to make the project successful,” the iPhone-maker adds.
In response, GT claims Apple was purposefully deceptive and failed to take the blame for power outages among other problems. “There is no point in engaging in a point-by-point debate on each issue,” the company said.