Apple’s Sapphire Glass Supplier Files for Bankruptcy
Apple had a lot of problems this year. Be it production delays or #Bendgate, the company has been in news for all the wrong reasons this year. Now, things seem to be going from bad to worse. Apple’s sapphire glass supplier, GT Advanced Technology has filed for Chapter 11 bankruptcy with plans to shut down two production plants and lay off 890 workers.
It has been reported that GT has requested permission from the bankruptcy court to close down the Arizona plant, even after the company stated that it planned to remain operational while it reorganized its finances. In addition to requesting approval to shut down that plant, GTAT has also asked that a New Hampshire bankruptcy court terminate its agreements with Apple, which it describes in a filing as “oppressive and burdensome.”
In the original statement announcing the Chapter 11 filing, GT CEO Tom Gutierrez said, “Today’s filing does not mean we are going out of business; rather, it provides us with the opportunity to continue to execute our business plan on a stronger footing, maintain operations of our diversified business, and improve our balance sheet. Only if GT winds down these operations will it be able to stop its mounting losses and re-focus its resources on the operation of its core business of selling sapphire furnaces and other products.” the company said on Friday.
Apple, in turn responded by pointing to its earlier statement that it remains committed to preserving jobs in Arizona and was consulting with state and local officials on its next steps. “We are proud of the jobs we’ve helped create in Arizona through Apple’s domestic manufacturing initiative and our state-of-the-art facility powered entirely by renewable energy sources. We are focused on preserving jobs in Arizona following GT’s surprising decision and we will continue to work with state and local officials as we consider our next steps.” Apple spokesperson said when asked about the matter.
Earlier, it was reported that GT had failed to meet technical milestones that Apple required in order to receive the final $139 million in advanced payment. GT Chief Financial Officer Raja Bal told investors that setting up production at the Arizona plant was more costly than the company had originally estimated. Within the past year, GT has been losing money with no solid success to back it up.