Apple Supplier in East Mesa Laying Off Workers

The bankrupt Apple supplier making sapphire glass in Mesa asked for court approval today to lay off 890 employees in Mesa, Massachusetts and New Hampshire, keeping a skeleton crew of 75 at the factories.

The company also has 550 temporary contract workers in Mesa who likely will be out of work as soon as the factory shuts down.

The company did not detail how many of the 890 job losses would occur in Mesa, but based on public information the company has provided, it appears to have about 470 workers there in addition to the 550 contract workers.

In new filings Friday, GT asked the court to allow it to cut staff at the Mesa factory, at its Salem, Mass. factory, and at the Merrimack, N.H. headquarters. The company said it has about 1,000 employees amid the subsidiaries involved in the bankruptcy, meaning it is asking to lay off nearly 90 percent of them.

It said the operations in Mesa should be completely wrapped up by Dec. 31.

“After a careful evaluation of all alternatives, and in consultation with its advisers, GTAT has determined that in order to preserve the value of its estates it must wind down its sapphire manufacturing operations,” the court documents said.

GT Advanced Technologies filed bankruptcy Monday. The company said in a court filing it needs to keep some employees on staff in Mesa to maintain the furnaces cooking sapphire glass there.

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The process of producing sapphire glass can take as long as 30 days, and the finished product is worth tens of thousands of dollars. Once the glass is finished, workers still will be needed to shut down the equipment. Apple uses sapphire glass on its home buttons and cameras.

The company said in its bankruptcy filing it had $85 million in cash. Last month, it reported it was struggling to get the factory running at full capacity as planned. Because Apple lent GT the money to build the factory, it had an exclusive deal to sell sapphire glass to Apple only.

Apple agreed to lend GT $578 million as prepayment for sapphire-glass goods, which GT was to repay over five years starting in January, either as credit against Apple’s purchases or as cash.

Apple officials issued a statement earlier in the week saying the bankruptcy filing was as surprise.

GT’s top executive said Monday the bankruptcy did not signal the end for the company.

“Today’s filing does not mean we are going out of business,” President/CEO Tom Gutierrez said in a statement. “We are convinced that the rehabilitative process of Chapter 11 is the best way to reorganize, protect our company and provide a path to our future success.”

Last month, the company reported it was still working to get the factory running.

“The build out of our Arizona facility … is nearly complete, and we are commencing the transition to volume production,” Gutierrez said on a conference call with investors.

By  Ryan Randazzo, The Republic | azcentral.com

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