GT technologies are forced to shut down their sapphire plants in Arizona and Massachusetts, costing 890 people their jobs. The reason is their liquidation crisis that is currently going on. GT technologies is blaming Apple Inc. (NASDAQ:AAPL) to be the only reason for their tragic losses. GT technologies said that the company regrets costing people their jobs but Apple has forced them to take desperate measures.
The court filings made by GT technologies have revealed contract details between Apple and GTAT. The contract took place one year ago when GTAT partnered with Apple for a sum of 578 million dollars. GT technologies claims that it has only been working on the sapphire contract with Apple because of the cumbersome orders and constant bullying of Apple employees. GTAT also claimed that the contract prevented them from dealing with other companies or from taking other projects.
One revelation that came to light was the fact that Apple penalizes up to 50 million dollars if a partner company leaks any information regarding the products. This fine does not take into account whether the leak is intentional or unintentional, it gets imposed right away. GT technologies (NASDAQ:GTAT) complained that working under such conditions wasn’t healthy for the company and it was also affecting its output.
GTAT is adamant that more details should be released regarding the contract intricacies with Apple so that the investors and stakeholders can also know the truth.
Apple so far hasn’t come out with any major comments on this situation; however the company has commented on the loss of jobs the GTAT employees had to suffer. Apple said that it will do its best to preserve these jobs.
The Arizona and Massachusetts facility were built and designed by Apple itself, with the help of state tax breaks in exchange for work of state employees. The facilities were leased to GT technologies for making sapphire for the company’s smartphones, iPads and Apple Watch. With GT technologies liquidation, it seems Apple will have to find a new partner.
It is rumored that Apple already had some reservations against GTAT’s ability to deliver good products. And it seems that Apple pulled the plug on GTAT as far as further financing was concerned. From here on we can assume that GT technologies will not have much to do in the future, considering they have fallen out of favor with Apple – it seems difficult that they will get anything more from the tech giant.
GTAT is known for overpromising and under delivering. Perhaps that is the reason for the scuffle between the smartphone giant Apple and Sapphire manufacturer GT technologies. This predicament has given birth to many questions: Who will Apple partner with now? Will the company abandon sapphire altogether or rope in another manufacturer? The latter option seems sane and highly possible because why would Apple simply replace something that has been getting good reviews in the market?
As for GT technologies, we don’t know if all of its accusations target at Apple Inc. (NASDAQ:AAPL) are correct but now the company has taken on a tech juggernaut, which will not earn them any favors in the future.