GT Advanced to axe more than 700 jobs at Arizona sapphire plant
Embattled sapphire maker GT Advanced Technologies on Thursday announced it will be eliminating more than 700 jobs at its plant in Mesa, Arizona, with the mass layoffs scheduled for completion by Dec. 15.
GT Advanced, which inked a $578 million deal to provide Apple with sapphire material, revealed its plans to permanently eliminate 727 jobs in a filing with the Mesa City Council, reports AZ Central. The company is required to furnish such information under the federal Worker Adjustment and Retraining Notification (WARN) Act.
According to GT's VP of human resources Linda Luman, who signed off on the filing, 524 production line workers, 108 technical jobs, 70 managers and 25 administrative positions will be liquidated by December. Employees who are to be let go were notified of the situation on Thursday, with layoffs expected to start next Tuesday.
Today's news is the latest development in GT's surprisingly rapid downfall. Initial signs of trouble came earlier this month when the company filed for Chapter 11 bankruptcy protection seemingly out of the blue. The firm's executives did not forewarn investors that problems were brewing, leading to a fast stock selloff that shed market value.
Following the bankruptcy filing, GT announced it would wind down sapphire production operations, but offered no further details as to what put the firm in such dire straits. Court documents later cited Apple's strict non-disclosure agreements as a reason for being tight-lipped about operations.
A court overseeing the case is currently deciding whether to make the details of Apple's arrangement with GT public, something Apple is arguing against by claiming the documents contain trade secrets.
GT Advanced, which inked a $578 million deal to provide Apple with sapphire material, revealed its plans to permanently eliminate 727 jobs in a filing with the Mesa City Council, reports AZ Central. The company is required to furnish such information under the federal Worker Adjustment and Retraining Notification (WARN) Act.
According to GT's VP of human resources Linda Luman, who signed off on the filing, 524 production line workers, 108 technical jobs, 70 managers and 25 administrative positions will be liquidated by December. Employees who are to be let go were notified of the situation on Thursday, with layoffs expected to start next Tuesday.
Today's news is the latest development in GT's surprisingly rapid downfall. Initial signs of trouble came earlier this month when the company filed for Chapter 11 bankruptcy protection seemingly out of the blue. The firm's executives did not forewarn investors that problems were brewing, leading to a fast stock selloff that shed market value.
Following the bankruptcy filing, GT announced it would wind down sapphire production operations, but offered no further details as to what put the firm in such dire straits. Court documents later cited Apple's strict non-disclosure agreements as a reason for being tight-lipped about operations.
A court overseeing the case is currently deciding whether to make the details of Apple's arrangement with GT public, something Apple is arguing against by claiming the documents contain trade secrets.
Comments
What a bunch of jerks.
The bankruptcy judge needs to add all the c-level executives the 700+, then turn over the Finance dept. files to the SEC to investigate those who sold a bunch of stock right before the stock price crashed.
So is Apple going to hire these people?
I doubt it. Though I would expect they would be the largest creditor.
The truth needs to come out on what happened here. Let the chips fall where they may.
So is Apple going to hire these people?
Not any time soon.
Apple owns the land and the facilities. They do not own the process nor intellectual property.
There's a good chance that GT Advanced will only give severance benefits to employees who sign an agreement that they will not work for Apple Inc. (or its subsidiaries) for n time and that any person divulging company confidential information will be subject to prosecution.
Thus, GT Advanced may emerge after bankruptcy proceedings as a patent troll.
Well I'm just curious because in Apple's only statement on this matter they said their main concern was preserving jobs. Unless they tried to preserve these jobs but were unsuccessful?
Well I'm just curious because in Apple's only statement on this matter they said their main concern was preserving jobs. Unless they tried to preserve these jobs but were unsuccessful?
Apple must do what is most beneficial to Apple. Whether that means hiring anyone associated with GTAT is anyone's guess.
Not any time soon.
Apple owns the land and the facilities. They do not own the process nor intellectual property.
...
Thus, GT Advanced may emerge after bankruptcy proceedings as a patent troll.
Actually that isn't the full picture, Apple aren't hindered by any IP issues with their arrangement to GT Advanced.
1. The facility is owned by an Apple affiliate (effectively Apple Inc.) It's leased to GT Advanced on the condition of sapphire production.
2. The prepayment to GT Advanced was structured as secured debt with the equipment in the facility as collateral
3. Apple had already been granted license for the relevant sapphire production patents owned by GT Advanced
4. Apple has the right to purchase additional related IP from GT Advanced at their option
This means Apple can take ownership of the facility, it's equipment and continue production using GT Advanced intellectual property, and potentially even their future intellectual property related to sapphire production.
In short, it would be Apple's perogative to maintain the skilled staff, and I fully expect that they will do this.
Admittedly I haven't been seeking out all the details of the Apple-GTAT partnership, so I defer.
That said, I am not convinced that Apple can simply turn the furnaces back on and tell (almost) everyone to come back.
America is a litigious society, so I'm guessing that lawyers will do their utmost to prevent an orderly resumption of sapphire production at the Mesa facility.
Certainly, Apple has interest in continuing progress toward production sapphire which is why they verbally pledged to preserve jobs, but I'm skeptical that GTAT will just hand over the keys to the car and walk away.
The deal is that Apple owns the plant and equipment; GTAT runs it. If GTAT puts up a fight then I suspect Apple will simply use it as an excuse to move sapphire production to South Korea or China.
So is Apple going to hire these people?
I was hoping Apple would buy the company.... Or Carl Ichan
Carl Icahn is for sale?
This wasn't always the plan. The plan was for GTAT to get rich making sapphire parts for Apple. They ran into technical difficulties that resulted in a roadblock. According to reports Apple tried to help get past whatever problems they had and couldn't. It looks like the execs at GTAT saw the writing on the wall and decided to try to get rich illegally. This isn't a reason to stop doing business in the U.S. Producing sapphire in size/quantity that was going to be needed is no easy feat. If it was Apple would have been able to assist in getting them to meet the deadline. Moving a failed (or seriously stalled) project to another country makes no sense.
You think Apple will spend a boatload of money on "simply" moving a sapphire plant (something that isn't in their core competency) to another country? We already know they can't produce what Apple needs.
Not any time soon.
Apple owns the land and the facilities. They do not own the process nor intellectual property.
There's a good chance that GT Advanced will only give severance benefits to employees who sign an agreement that they will not work for Apple Inc. (or its subsidiaries) for n time and that any person divulging company confidential information will be subject to prosecution.
Thus, GT Advanced may emerge after bankruptcy proceedings as a patent troll.
I'm not a lawyer, but I'm pretty sure that any agreements like that would have to be approved by the bankruptcy court, and I don't see why the court will approve that sort of thing. Screwing over a major creditor isn't likely to sit well with the judge.
I know you were just having fun - but strip the veneers of so called "sophistication" from him and you've got a street pedlar who has hawked his soul a million times over.
What does he care about anything other than the almighty dollar ?
He'd try and pick GT up for a penny on the dollar and flog it off to whoever - Samsung probably if he couldn't rape Apple in a side deal.
F the employees, f his holding in Apple. It's just business - no hard feelings, right fellas ?
Huh? Apples loan is secured through the capital,in the building. As for cashing out well that has yet to be proven. I'm sure a compete audit is coming which should reveal any ethical lapses.