Report: Apple committed to Mesa, despite GT bankruptcy

Nov 20, 2014, 2:56 PM | Updated: 2:56 pm
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PHOENIX — Apple’s partner company in the Phoenix area may have gone bankrupt, but the tech giant is still reportedly committed to making some of its products in Arizona.

Bloomberg reported Apple wants to maintain production in the Valley after the bankruptcy of GT Advanced Technologies and subsequent fallout between the two.

“They’ve indicated their commitment to us: They want to repurpose that building and use it again,” Mesa City Manager Christopher Brady said in a recent interview. Apple has said it’s focused “on preserving jobs in Arizona” and promised to “work with state and local officials as we consider our next steps.”

GT was supposed to make Sapphire glass for Apple’s new products, but announced last month it would shutter the factory. GT described the operation agreements with Apple as “oppressive and burdensome.”

Documents showed an ugly relationship had developed between Apple and GT.

In an Oct. 8 filing, chief operating officer Daniel W. Squiller accused Apple of using a “classic bait-and-switch strategy” with a deal that he called “massively one-sided.” He said Apple offered to buy 2,600 Sapphire-dedicated furnaces that would be operated by GT, but soon reneged on the deal and changed the terms.

Squiller said Apple then demanded a new deal in which GT would borrow up to $578 million from Apple for the furnaces and get repaid over the next four years, forcing the Sapphire maker into the role of “captive supplier” in which it assumed all the risk and Apple was not on the hook for buying any of the product. The executive said the deal also prevented GT from doing business with any other electronics maker.

In a separate filing, Apple lawyers accused the Merrimack, New Hampshire-based Sapphire company of making false statements about the deal, among other allegations. Apple says GT was not forced into any deal because it was represented by “sophisticated outside counsel,” and it noted that the Sapphire maker’s stock price soared when news broke about the agreement. Apple said it has “bent over backwards” to work with GT.

“Far from the villain in these Chapter 11 cases, Apple is the largest victim of (GT’s) failure to perform under the agreements it negotiated at arms’ length and with advice of counsel,” Apple lawyers said.

The Associated Press contributed to this report.

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Report: Apple committed to Mesa, despite GT bankruptcy