Slashdot Mirror
Apple To Build New $2 Billion Data Center In Bankrupted GT Advanced Buildings
mrspoonsi writes Apple announced it will spend about $2 billion to build a new data center in Mesa, Arizona. It will be housed in buildings formerly used by GT Advanced Technologies (GTAT), which went bankrupt last year after failing to supply sapphire display covers for the iPhone 6. The data center will be powered entirely by renewable energy. It will be a "command center for our global networks." Apple has said it would help find work for people affected by GTAT's bankruptcy. It's possible some of those former GTAT employees might help construct the new command center. When Apple initially partnered with GTAT to make sapphire displays, the company invested millions in a sapphire production facility. It makes sense that Apple would want to do something with the building if it couldn't make sapphire there.
These are so-called "lights out" operations because they employ so few employees (relative to the prior residents) that the ultimate benefit to the community is extremely limited.
When I saw this snippet in TFS:
I actually thought "just like a conquering nation making their new prisoners build their own prisons."
Welcome to the Panopticon. Used to be a prison, now it's your home.
That's not cynicism, this is cynicism.
Promise contract to company.
Make contract impossible to fulfil.
Bankrupt company.
Sweep up company assets on the cheap.
???
Profit.
When I saw this snippet in TFS:
I actually thought "just like a conquering nation making their new prisoners build their own prisons."
First thing that came to my mind as well. Life is hilariously cruel.
Apple. Guilt. Wtf? I think not.
That's what came to my mind as well. Certainly seems fishy.
This is my signature. There are many like it, but this one is mine.
Your forgot 'write-off your holdings of company debt for pennies on the dollar'.
Bankruptcy was the planned outcome if the sapphire didn't workout. Leaving most of the debt in Apple's hands.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
More like:
receive contract offer from company.
Accept contract you know you can't possibly fulfill.
Fail to meet the terms of the contract.
Go bankrupt.
???
While we like making the big company the bad guy. GTAT Executives were the ones who really screwed up. If you are going to have a business relationship with Apple, you better be sure that you are big enough to operate without Apple.
It is no secrete that Apple is very fickle when it comes to venders. If you are not giving what Apple wants they will not sit there and take it, they will drop you in an instant. Apple has the resources to drop seemingly vital venders, and rework its products just so they get the deal that they want.
GTAT should have known this, and avoid Apple unless they had the resources to manage without them as well. However they just beefed up their company size to produce something on a mass scale that they haven't before. Just so they can have a chance to win a contract.
If I were a GTAT employee I would be more pissed at the executives for hiring you for a high risk position without letting you know the actual risk.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
slight ftfy:
Promise contract to company.
Make contract impossible to fulfil.
Bankrupt company.
Sweep up company assets on the cheap.
Profit.
Nah, those are iCrocodile Tears.
"Transparent" is a shit show that trades on every stereotype going. A man in drag is NOT a transsexual.
These are so-called "lights out" operations because they employ so few employees (relative to the prior residents) that the ultimate benefit to the community is extremely limited.
There's even a new german data center where they scrub out much of the oxygen. Apparently it helps with both security and fire control. No humans can go in.
I'm surprised by the choice however because one of GTs claims was constant power disruptions were a factor in their poor crystal quality. does not bode well for a data center. And I would think that one would prefer cool outside temperatures and a source of water for cooling would be good too, both of which are in short supply in most of arizona.
On the otherhand GT's original product was solar cells. And Arizona is a good place for clear skies and sun in the US. maybe they are thinking about a solar powered data center? I'd think it not important to co-locate it near the solar cell supplier however.
The ultimate benefit to the community will be taxes and perhaps upgraded infrastructure.
Some drink at the fountain of knowledge. Others just gargle.
That's not cynicism, this is cynicism.
Promise contract to company. Make contract impossible to fulfil. Bankrupt company. Sweep up company assets on the cheap. ??? Profit.
I know it's cool to hate Apple, but GTAT is who made the promise they couldn't keep and Apple is the company that got left holding the bag.
Some privacy policy Slashdot.
And because a lot of Slashdot readers blindly hate on Apple any chance they get, your informative comment will get moderated into oblivion.
Get free satoshi (Bitcoin) and Dogecoins
Were talking about Apple and GT, not microsoft and Nokia. In the apple GT case, apple lost a boatload of cash and a banner product. I don't think they came out ahead. GTs market capeven if they got all of it is spit in a bucket compared to what apple lost.
Some drink at the fountain of knowledge. Others just gargle.
Isn't that how Transcendance started? Do we have to worry about a computer-translated Steve Jobs healing the sick, reversing pollution, and turning people into his little tools?
What do you do that makes you so much better than these people?
Yes, Apple is the company that is left
Make promises you know your company can't keep.
Collect big bonus.
Profit!!!!!!!
Jump ship and move on to the next company before it becomes obvious that they are in deep trouble.
Lather, rinse, repeat.
Any insufficiently advanced magic is indistinguishable from technology.
Horrible Bosses 2
Nothing i have to say is worth saying.
Yes, Apple is the company that is left
Right, just like you're still left if some company you hire to paint your house goes bankrupt in the process of failing to keep their painting business in good shape. Might be even more annoying if that company happened to be run by your nephew, in whom you invested a few thousand dollars - so now you don't get your house painted AND you lose that money. But you're "left" afterwards ... and you seem to find that evil, somehow. Another person who's never run anything tried to invest in anything, or probably DONE anything.
Don't disappoint your bird dog. Go to the range.
Right, I mean, getting a data centre building for half a billion dollars losses is really cheap. Sounds like an ideal business plan!
Alternatively (and involving more sanity), Apple started a deal in good faith with a company. It didn't work out. Apple went out of their way to figure out how the deal going south could do as little damage to the community as possible.
You buy a company, bankrupt it because your idea didn't work out and then offer to help some of the people who;s job you destroyed.
Out of curiosity, what do you get out of deliberately mis-representing what happened? Why the fiction? Why lie about it? What do you hope to accomplish? Really, it's an honest question (unlike your dishonest fantasizing). Please, be specific as you answer, so people can better understand people like you.
Don't disappoint your bird dog. Go to the range.
They could've used that sapphire production capacity to make substrates for high-power LEDs and quickly recouped their investments given the INSANE markup most retailers get (I've seen upwards of 6,000% profit margin on some of these units.)
Or, they could've had a minor bit of modification, and done silicon substrates for the same thing.
But nooooo. They're going to make it a data center.
*facepalm*
You have obviously never built out a data center after the walls are up, the AC is running at full blast, and rows after rows of empty racks are waiting for installation of servers, switches and fiber cables.
Renewable energy doesn't require engineering?
What struck me was the word 'possible'. They make it sound as if they are there to help those who lost their job, which would be great. What it actually means is that if you apply and you worked for GTAT, they won't hold it against you, much.
Don't fight for your country, if your country does not fight for you.
While I agree that GTAT doomed itself by signing the agreement with Apple, the terms of the agreement were so outragious that I think that Apple still deserves a lot of blame. Here's the Forbes article on the contract:
http://www.forbes.com/sites/chuckjones/2014/10/30/this-is-why-apple-did-not-want-its-gtat-contracts-made-public/
your informative comment will get moderated into oblivion.
(Score:5, Interesting)
How exactly was GTAT forced to accept an impossible task by Apple? Like a thousand companies before it, GTAT management was blinded by dollars and overestimated their capabilities.
First of all, Apple were the ones who bought the land and facilities they are turning into a data centre FOR GTAT to use to make Saphire. So they already own the plant.
Secondly, they have not bought GTAT at all. At least hate Apple for legit reasons, not made up ones.
Apple never bought GTAT. GTAT's old management was entirely responsible for those jobs being lost.
You buy a company, bankrupt it because your idea didn't work out and then offer to help some of the people who;s job you destroyed.
What part of your statement is true?
Did Apple buy GTAT? No. They paid GTAT for a contract to build sapphire that GTAT could not deliver. When GTAT declared bankruptcy, Apple would be their largest creditor and are entitled to some portion of the assets but they did not "buy" GTAT. The rumors are that Apple advanced GTAT $350 million to build whatever facilities they would need to supply Apple with the necessary amount of sapphire and equipment. So GTAT may have spent part or all of the money.
Second it wasn't Apple's idea to get into the sapphire business for GTAT. GTAT was in the business long before Apple. Now GTAT's problem was that they were not a large scale manufacturer of sapphire or manufacturing equipment. At best they had a small business doing both. According to estimates, Apple would need at least 2600 furnaces to meet with estimates. From what I read, the original agreement was that GTAT would manufacture, install, and operate those furnaces at an Apple facility. They were not able to do so and the agreement had GTAT manufacturing rather being simply an equipment manufacturer.
Well, there's spam egg sausage and spam, that's not got much spam in it.
No.
Apple offer a company a contract for a product of certain specification and quality.
Company accepts, borrows a shit ton of money from Apple but can't produce the goods.
Apple offers to change the repayment terms to give company more time to produce product to the right spec and avoid bankruptcy.
Company CEO and CFO unload shares at high price, then announce bankruptcy and proceed to blame Apple.
Apple uses the plant THEY bought for the company to produce the product for alternative reasons and in the process offers jobs to those who lost them.
Company still owes millions, the CEO now has millions in his bank from selling shares when he knew things were not working out while employees are laid off.
I think that is a more accurate account of what happened.
let's say you run a factory with a capacity of 100 widgets/year. the current market for widgets is around 150/year. megacorp people show up and say they want widgets, tens of thousands of widgets yesterday. so you draw up a contract for selling 5 years of 10,000 widgets (50,000) and begin construction of a 10,000/year widget factory. then megacorp says, "nah. we don't want your widgets anymore at the contract price and we have a team of lawyers that will tear the contract to shreds."
what are you gonna do? tell your investors, "no. we didn't want to accept the 10,000 widget contract because they might pull the rug out from under us" ?
Cynicism and cutthroat business practices are frequently synonyms.
And while we're at it, here's the bankruptcy statement from the GTAT CEO:
https://www.kccllc.net/gtat/document/1411916141028000000000004
Great logic. Just come out and admit you hate Apple and be done with it instead of trying to present your wild speculation as some kind of insightful fact.
the NSA just got another data center?
Where Apple failed, Kyocera succeeded in getting a Saphire phone to market.
http://www.kyoceramobile.com/brigadier/
People buy Apple products due to the cult of the logo, not because their better products are better, they are clearly not.
Apple excels at selling overpriced products to gullible cosnumers.
Kyocera however, builds real products for real people, and the only phone with a Saphire screen.
I am really not surprised at the terms of this contract. Yes, they suck. They were written by Apple's lawyers for Apple. They are obligated to seek the most favorable terms possible for their client. They seem to be creative about screwing people, but what do you expect? Not only are they lawyers, they have been writing similar contracts probably for decades.
If you don't consider those to be reasonable contractual terms, don't accept the contract. GTAT had lawyers too, and they had something Apple wanted badly. You and I can look at these terms, and say, "These terms are completely unreasonable. No matter what happens, it isn't worth having a client on these terms." So what gets GTAT off the hook for accepting them?
Missed the part where GTAT was forced at gunpoint to sign a contract they considered bad?
You seriously think GTAT wasn't simply being greedy and ignoring terms they they thought were unreasonable, instead of pushing back at all as you are supposed to in any contract negotiation?
My thinking is that GTAT just accepted the contract Apple put together because the GTAT leaders knew it wasn't going to work out anyway, but they could siphon off a ton of funds before Apple figured things out.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Where Apple failed, Kyocera succeeded in getting a Saphire phone to market.
Well it's nice and all that Kyocera has shipped a phone with a screen that shatters more easily...
But the question really is, do yo honestly think whoever Kyocera is getting screens from, could have produced 74 *million* of them last quarter? Because that's what Apple needed.
And even then, it wasn't Apple that failed to produce the screens - it was GTAT. So you are basically kicking a company when it's down. Way to make a bankrupt company feel worse.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
While I agree that GTAT doomed itself by signing the agreement with Apple, the terms of the agreement were so outragious that I think that Apple still deserves a lot of blame.
Spare me. If they signed an outrageously one sided business deal then they deserve what happens to them. Business deals like this are for people wearing their big boy pants. If you want to play in the big leagues then you probably should have your lawyers at least glance at the agreement to see if it will bankrupt you.
Reminds me of the end of Office Space where is he working the construction crew cleaning up the remnants of the building he used to work in.
The only thing necessary for evil to triumph is for it to be pitted against a slightly greater evil
While they were to blame, that wasn't exactly what happened. They bound themselves to a contract which was skewed wildly in Apple's favor. Basically they bore all the risk - borrowing all of the money to gear up for production, resulting in them bearing all the losses if the product didn't live up to specs or if they weren't able to produce sufficient quantity. Normally in a situation like this, a vendor orders and pays for samples, the manufacturer produces them, then the vendor decides whether or not to pay for a full order. In this case, Apple requested samples, the GTAT execs went "OMG Apple!" and bent over backwards (or forwards depending on what analogy you want to use), borrowing huge amounts of money and investing it in massive production facilities when they didn't even have a firm order from Apple yet.
Apple bears some of the responsibility for using their huge size to coerce behavior out of a supplier, like how Walmart coerces suppliers to give them ruinous pricing. But the bulk of the responsibility lies squarely with GTAT for agreeing to those terms. Companies like GTAT or Walmart suppliers (or even employees who meekly accept whatever terms their employer sets) put themselves into these situations through their unwillingness to stand up for themselves just to hold onto a contract (or a job).
It's like the saying goes, before you can respect someone else, you have to respect yourself. These companies (or employees) didn't respect themselves, and it's only a natural consequence that they get walked all over. Show some pride in your work. If you truly believe you have the best thing since sliced bread, then it's Apple which should come to you on their knees begging if they want their products to have the best components. If they don't, it's their loss and their competitors' gain.
Yes, actually. That's exactly what you should do. What contracts are all about is risk. Your rule of thumb as the service provider is to make sure that you don't accept more risk than you can handle, and you make sure that if you have to accept risk, it is priced into your services.
There is a point where the potential risk is not worth the potential reward. Gambling many times more than the value of your company falls into that category. GTAT's lawyers failed to obtain good terms for their client. GTAT accepted those terms anyway. That's two fuckups. Anything else that impacts those contractual terms would be three strikes, and guess what happened?
It seems like you don't do business contracts. No client is ever going to be more important than your business. Also, when your lawyers bring you a contract that looks like the one GTAT accepted, fire your lawyers and get some that will actually keep their clients in business. When you have something that someone else wants, you can afford to get good terms.
Contract with a company to build bleeding edge glass in huge volumes, requiring them to leverage themselves to the hilt to build a new plant to meet the demand.
Skip out on said contract.
Gobble up the company's assets in the resulting bankruptcy for pennies on the dollar and use them for your needs.
Obviously the best person for the job is the guy who made glass before.
Great logic. Just come out and admit you love Apple and be done with it instead of trying to present your wild speculation as some kind of insightful fact.
Why not? Building out a data center is mostly unboxing equipment, following diagrams, placing equipment into the racks, screwing everything down, running cables and port mapping.
Uh, no. Sure, there's a whole lot of that drudgery, but there's a frack of a lot of other work involved. Security system design and implementation (my profession), air flow design, work flow design, interior walls need to be constructed, UPS design and installation, fire system needs to be redone entirely, AC system for a data center is entirely different than the one that was installed for a factory, logistics and scheduling of material delivery, it's a huge amount of work. The actual installation of servers is a bit of an anticlimax.
"Think about how stupid the average person is. Now, realise that half of them are dumber than that." - George Carlin
Yes. I'm not sure that Apple didn't come out losing on this deal. But they definitely imposed contract terms that made the accomplishment impossible...and if an earlier story I read was correct some of those terms were done via an amendment made after the contract was signed.
This doesn't prove that Apple was malicious rather than incompetent, and the available evidence seems to show that the affair cost them considerably...so I lean towards incompetent rather than malicious. IIUC GT was not in a position were it could refuse to accept the impossible terms.
I think we've pushed this "anyone can grow up to be president" thing too far.
The company and it's investors don't need to make money, just the psychopathic executive team and that is exactly the way most modern corporations are run, banksters much. They kept the bonuses based upon fraud and that doesn't include offshore tax haven bonus from predatory companies, seeking to prey upon other companies and their investors.
Chaos - everything, everywhere, everywhen
...is because Apple made a similar "impossible to fulfill" deal with Corning 10 years ago. Or did you think Apple was secretly hoping to bankrupt that company as well, so it could lose money and a product with hype just to pick up some real estate on the cheap?
Get a life, guys.
It's pretty close to reality.
Apple said "Here's a half billion dollar contract, you now work exclusively for us". GTAT spent a whole bunch of that money building manufacturing capacity. Turns out sapphire isn't quite as good as gorilla glass. Apple cancelled the contract.
Gtat couldnt deliver for apple due to physics. Many materials people knew and stated this before the deal. Sapphire could never pass drop tests like gg. huge failure in dd for tim cook.
Apple got the order wrong.
He should've downloaded the content, do a few grep, and get his job done in a few months. No crawler needed.
I haven't been following the story but I assume GT signed it because they were forced at gunpoint--otherwise you would be blaming the idiots who signed a bad contract.
Then GTAT, being in the sapphire business, should have known that and said no to Apple's contract. If I own a business and a potential customer wants me to do something that's impossible, I don't say yes then blame the customer when I fail to deliver.
Well, there's spam egg sausage and spam, that's not got much spam in it.
Unfortunately, Forbes has a track record of posting factually inaccurate stories about Apple and many opinion pieces with a decidedly anti-Apple bent. So the article is questionable.
THIS was my EXACT thought. The from months ago about this deal and it 'falling through' now makes more sense. Shame on Apple if that's even semi-true.
Companies that take orders like that are incredibly rare exactly for that reason, they get locked in with their client. And the client ... is always right, isn't that the American saying?
No. Apple offer a company a contract for a product of certain specification and quality. Company accepts, borrows a shit ton of money from Apple but can't produce the goods. Apple offers to change the repayment terms to give company more time to produce product to the right spec and avoid bankruptcy. Company CEO and CFO unload shares at high price, then announce bankruptcy and proceed to blame Apple.
You forgot they also asked for $3.7 million for bonuses in the bankruptcy filing.