727 workers in GT Advanced's Mesa factory get the ol' heave-ho

727 workers in GT Advanced's Mesa factory get the ol' heave-ho
Now that GT Advanced Technologies has filed Chapter 11, and plans on making its way through the process of bankruptcy, the company has filed with the Mesa City Council its intentions to fire 727 workers. The surprise bankruptcy filing was made so that Apple could not demand back the $440 million it had already paid the company. The pre-payment was made in the form of a loan to GT Advanced, and was to be used to convert Apple's facility in Mesa into a factory producing sapphire crystals. These crystals were supposed to be used to make sapphire screens for the Apple iPhone 6 and Apple iPhone 6 Plus.

GT Advanced failed to reach a certain milestone which allowed Apple to hold up the last payment of $139 million. This caused the company to go into default under its contract with Apple, since GT Advanced's cash level fell under an agreed upon floor. This default could have allowed Apple to ask for the immediate repayment of the $440 million it had already laid out. To prevent this from happening, the Chapter 11 filing was made since it gives a company protection from its creditors while it reorganizes.

GT Advanced's VP of human resources Linda Luman, said that the 727 workers to be let go were told of their predicament on Thursday. Layoffs should start this coming Tuesday and should be over by December. Breaking down the layoffs, 524 production line workers, 108 people doing technical jobs, 70 managers, and 25 employees in the administrative level, have already received the bad news. GT plans on closing the Mesa factory.

source: AZCentral via AppleInsider

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5 Comments

1. james004

Posts: 486; Member since: May 15, 2013

why are they completely closing the company??? its a valuable asset!

3. kenobi

Posts: 35; Member since: Apr 30, 2013

They're in a huge debt. The operational cost is too high compared to the income which means they're losing money. so in business sense, cutting the cost and throwing the debt out is the best way. It's really unfortunate but nothing strange and no need to blame anybody. Just business as usual.

2. xeonfire

Posts: 94; Member since: Feb 15, 2014

Its only valuable if they want to continue the business, not if the CEO wants to cash in and run..

4. tedkord

Posts: 17417; Member since: Jun 17, 2009

Best wishes to the affected workers. I hope land on their feet. And I hope CEO lands in prison for insider trading.

5. Napalm_3nema

Posts: 2236; Member since: Jun 14, 2013

I second that. It's sad these folks have to pay for the sins of their CEO. Now they are out of jobs before the holidays, and he is $10 million richer. He needs to spend a long time in prison, and not some posh "Club Fed" prison like those Enron jokers got.

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