By: Joshua Bowling
A company manufacturing sapphire for Apple announced on Sept. 29 they had $85 million of cash; on Oct. 6, they filed for chapter 11 bankruptcy.
GT Advanced Technologies (GTAT) has worldwide offices ranging from Montana to Hong Kong.
GTAT announced on Nov. 4, 2013, that they had signed a multi-year supply agreement with Apple to own and operate the furnaces and involved equipment at the Mesa plant on Signal Butte and Elliot roads.
Less than a year later, the plant declared bankruptcy and saw a sharp drop in stocks.
At opening on Oct. 6, GTAT’s stock was $11.06. At close, that number had fallen to 80 cents.
Tom Gutierrez, president, CEO and director of GTAT, said on Nov. 4, 2013, that the deal with Apple “represents a significant milestone in GT’s long term diversification strategy.”
NASDAQ announced the company’s stock would be suspended for trading in the company’s common stock on Oct. 16.
GTAT said in a press release they would not be appealing NASDAQ’s decision.
The plant was supposed to bring upward of 700 jobs to Mesa. Now, however, residents are losing hope for the city’s economy.
Tony Felix, a student at MCC, believes there is a chance for a turnaround.
Since it’s partnered with Apple, he said, it will bounce back.
“I feel like technology will catch up with the promises they’ve made,” Felix said.
Gutierrez sees a comeback in the company’s future as well.
“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,” he said in a GTAT press release.
“We plan to continue to operate as a technology leader across our core set of business,” Gutierrez went on to say.
The company’s stock, however, has continued to fall.
Their stock opened at 51 cents on Oct. 16, and closed at 44 cents.
In an Oct. 10 court filing, GTAT said they are seeking to “wind down” their Mesa, Ariz. plant.
“Pulling the plug” is not the answer, according to the filing. The “wind down” process would keep 75 employees overseeing the current sapphire production.
This could be completed as early as mid-November, according to the court filing.
The second step would consist of 15 GTAT employees fabricating the sapphire boules and putting their equipment into decommission.
Next, the plant would need to be cleaned and shut down. According to the court filing, these two steps could be completed by Dec. 31.
The court later approved the Wind Down Plan, which affects both the Mesa, Ariz. and Salem, Mass. plants.
GTAT will be updating the press releases on their website as the situation unfolds, according to their media relations staff member, Jeff Nestel-Patt. Beyond that, Nestel-Patt declined to comment.
The Wind Down Plan requires the loss of 890 jobs, the court filing read.
This number does not include the approximately 550 temporary workers at the Mesa facility, as they are employed through a temporary staffing agency.