back to article What a Mesa: Apple vows to re-use titsup GT sapphire glass plant

Apple has vowed to protect jobs in Mesa, Arizona, and told city leaders it will not walk away from its stricken sapphire glass factory. The future of the entire city of Mesa looked deeply uncertain after Apple ally GT Technologies filed for bankruptcy, shutting down the factory and axing 890 jobs. Now Cupertino has quietly …

  1. James 51

    on preserving jobs tax breaks in Arizona.

    FTFY

    1. This post has been deleted by its author

    2. asdf

      Arizona being a rabidly red state full of old people already has a fairly business friendly climate so the tax breaks Apple got aren't that out of the ordinary for the area. The low tax base is also why our schools rank near the very bottom in the US. Great for luring call center jobs (or manufacturing if we are lucky) but the next silicon valley here. Don't think so. That actually takes good colleges (as opposed to ASU where dumb rich kids come to party).

  2. NinjasFTW

    No doubt they will get to pick it up for a bargain discount price while all the original investors get pennies in the pound back!

    Makes for an interesting business plan

    1) get company to commit to manufacture something that it probably wont be able to meet its targets

    2) cancel very expensive contract based on breach of targets and force company to declare bankruptcy

    3) pick up companies remains for nothing and get good PR for rescuing American manufacturing/job - Profit!

    1. Anonymous Coward
      Anonymous Coward

      You can't really blame Apple if a company is run poorly.

      1. Kevin Johnston

        But if your main customer encourages you to stretch your goals to a new technology (maybe even sharing costs) to enable them to expand their range and then dumps you when it proves to be too much too soon, who bears the responsibility?

        Especially when said main customer buys up the carcass for a song....

        1. James 51

          Took me a moment to remember you weren't talking about Nokia and Microsoft.

      2. Handy Plough

        Apparently, it seems that 3 people disagree. GT's mismanagement, lack of negotiating ability and greed is entirely Apples fault alone. As is the spread of the ebola virus probably...

        1. DavCrav

          "Apparently, it seems that 3 people disagree. GT's mismanagement, lack of negotiating ability and greed is entirely Apples fault alone. As is the spread of the ebola virus probably..."

          Just because someone is foolish doesn't mean that it's morally or legally right to rip them off. See con men and little old ladies for a similar thing where you probably have a different reaction.

          1. Handy Plough

            "Just because someone is foolish doesn't mean that it's morally or legally right to rip them off."

            What utter and complete bollocks. Apple didn't hold a gun to the CEo of GTAT's head and demand a signature. GTAT's board made their bed. To paraphrase Apple; GTAT needed to put there big boy pants on. Part of that is having the bottle to say "fuck off".

      3. John Tserkezis

        "You can't really blame Apple if a company is run poorly."

        Yeah, but you can blame Apple for entirely taking advantage of a company gone broke, that was indirectly caused by THEIR OWN "highly restrictive" conditions.

    2. James 51

      Banks have been doing that for years.

    3. Anonymous Coward
      Anonymous Coward

      Apple already owned the plant!

      The deal was GT was Apple would loan GT money to equip the plant with sapphire furnaces, and GT would pay them back with either cash or sapphire. They couldn't produce the sapphire on schedule (perhaps because they make the furnaces, and have no experience operating them) so they were forced into bankruptcy.

      The plant was ALWAYS Apple's to do with what they want.

      1. asdf

        Re: Apple already owned the plant!

        >The plant was ALWAYS Apple's to do with what they want.

        Yep and the beauty is they still were able to find management in another company dumb enough to take on a lot of the initial risk with little change of reward. Sounds great on paper as long as their other suppliers don't grow some brains.

      2. John Tserkezis

        Re: Apple already owned the plant!

        "The plant was ALWAYS Apple's to do with what they want."

        No, Apple had INVESTED in the plant. That does not equal to ownership. During the administration phase, Apple (as well as any other investors, creditors, employees, whoever) have right to reclaim any oweing mones.

        This is where things get messy. It would be likely *all* the moneies/stock owed is going to be more than what's left with the company basically broke now. So, there's a pecking order, certain creditors get higher priorities than others, so they get paid (at least something) first. No guess that contractors and employess are the shit kickers at the bottom of the list - they're just not important enough.

        You guess who's at the top of the list.

        Apple's "valiant" effort to keep employees will likely involve "you work for Apple now, forget any outstanding pay you might have with your old company - which doesn't exist now."

        That's how real life works boys and girls.

        1. Anonymous Coward
          Anonymous Coward

          Re: Apple already owned the plant!

          No, Apple OWNED the plant. They built it themselves, GT was not involved in the construction of the plant.

          Their investment was in the form of several hundred million in loans for GT to equip the plant, i.e. provide & install the furnaces (the selling of which is GT's business) plus whatever other infrastructure inside the plant is needed to support them (cranes, conveyors, whatever...)

          1. MacGyver

            Apple tricked a small company out of their IP, it's that simple.

            I was under the impression that the company owned the patent for the glass tech, and that the company signed an exclusive contract for them to make them only for Apple, and in exchange Apple would loan them the money to purchase the equipment needed to meet Apple's demand. However the contract stated that if they failed to make the payments on time that the company's IP was collateral. Then Apple simply didn't order any screens, and because the company couldn't sell the tech to any other manufacturer due to the exclusivity clause, Apple just sat and waited until they defaulted and now they simply own the company. Not really playing fair in my opinion, and the fault is solely with the company's lawyer that didn't realize that Apple was under no obligation to purchase anything.

            Apple tricked a small company out of their IP, it's that simple.

            1. Handy Plough

              Re: Apple tricked a small company out of their IP, it's that simple.

              "Apple tricked a small company out of their IP, it's that simple."

              Wow.

              Tinfoil hatter?

            2. John Smith 19 Gold badge
              Angel

              Re: Apple tricked a small company out of their IP, it's that simple.

              Noes! Surely not.

              They wouldn't do something like that

              They are good.

              Stephen Fry says so.

            3. Anonymous Coward
              Anonymous Coward

              @MacGyver

              Your impression is incorrect. GT manufactures the furnaces that make the 50 kg (or whatever) sapphire boules. That's it. They have no actual manufacturing experience (especially cutting the glass) or IP related to manufacturing, so I'm not sure why Apple was dumb enough to believe their assertion that they could run the plant and produce cut glass for Apple.

              Just because GT is screaming from the rooftops they were screwed, doesn't mean Apple didn't get screwed in this deal too. The bankruptcy hasn't gone through, Apple doesn't "own" them and probably isn't interested in owning them since they can't operate the factory for Apple. Apple's efforts to use sapphire have been set back several years by this debacle, and they'll have to find someone else who is capable of manufacturing the glass for them.

              It isn't clear what Apple will end up owning, but they probably won't get back their $350 million or so investment. There isn't much IP they could get from GT unless they wanted to make furnaces, which they don't, at best they'll end up owning some furnaces which they'll need if they go forward with this plan down the road, with another partner.

  3. Chad H.

    I hear they're going to be doing some Black operations in Mesa...... (Or should that be Space Grey)

  4. Anonymous Coward
    Anonymous Coward

    Dreams...

    > Apple has always dreamed of moving production back onshore in America

    I dream of unicorns and threesomes, but that doesn't have much to do with real life.

    1. Anonymous Coward
      Anonymous Coward

      Re: Dreams...

      I dream of unicorns and threesomes, but that doesn't have much to do with real life.

      Wow, even sorted in order of decreasing likelihood :)

      Note to self: get out more.

      1. This post has been deleted by its author

      2. Rugster

        Re: Dreams...

        Nah, still waiting to see a Unicorn......

    2. Observer1959

      Re: Dreams...

      Eww why would you want to have sex with a couple oh horned horses?

    3. Francis Boyle

      Dreams . . . can come true

      There's this couple called Bubba and Jay-lynne who would quite like to meet you.

  5. Anonymous Coward
    Anonymous Coward

    Apple didn't run them into the ground for no reason.

    1. Anonymous Coward
      Anonymous Coward

      Free object lesson on how to keep your eyes on the prize, you suppose?

      1. This post has been deleted by its author

  6. thomas k.

    sensationalize much?

    Even in these tough economic times, I doubt Mesa's future existence as a city hangs on one factory employing 900 people.

    1. asdf

      Re: sensationalize much?

      Exactly as any local can tell you that city is huge (stretches from 101 to nearly Apache Junction) and is largely suburbs anyway. Glendale on the other hand if had to guess future looks a lot more shaky due to bad leadership.

  7. Eddy Ito

    Let's see Apple got a $10 million grant Apple got for the construction of the plant, a new power station so the factory can use 100% renewable energy and let's not forget the area around the plant is designated a foreign trade zone cutting taxes over 70%. Why give that up? Apple is committed to making greater profit, regardless of what that Ive guy says.

    Think I could move to Mesa and score a deal like that? Never mind, it's in the middle of the desert and I imagine the sushi isn't the freshest.

    1. asdf

      >Think I could move to Mesa and score a deal like that? Never mind, it's in the middle of the desert and I imagine the sushi isn't the freshest.

      #1 - Mesa sucks but not for the reasons you mention. At least west Mesa is relatively dirty, has fairly high crime compared to the rest of the East Valley (and an especially high concentration of sex offenders). East Mesa is nicer but it is sleepy as hell suburbs full of Mormons (so not exactly a paradise for pub crawling).

      #2 - Middle of desert on google maps perhaps but middle of urban area of 5 million people.

      #3 - You can actually get pretty good sushi here (yes I know you were making a joke). Granted its not bay area quality but you are better off getting sushi here than you would be in Iowa or even in most rural areas even a few hours from the coast.

  8. Anonymous Coward
    Anonymous Coward

    Destroy the company, buy it for pennies.

    The American way. Microsoft did it with Nokia, Apple did it with these guys.

    Well done, Apple and Microsoft fanboys, you much be really proud of yourselves.

    1. Steve Davies 3 Silver badge

      Re: Destroy the company, buy it for pennies.

      I don't see any evidence that Apple are even remotely interested in buying GT. With GT getting out of Saphire production what would Apple be interested in? They own the building already.

      Remember that the GT CEO is under investigation by the SEC. His 'timely' (cough-cough) sale of his shareholding just before they went belly up is a might suspicious IMHO.

      My take on this that this was the way for the CEO & CFO to fund their pensions and retirement to somewhere well away from US law.

  9. Captain DaFt

    "Apple had told him it was hellbent “on preserving jobs in Arizona”"

    Might be more reassuring if they picked another destination to follow for their plan... unless all they have to offer is good intentions.

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