GT Technology set for messy divorce from Apple

600full-kramer-vs.-kramer-posterIt seems that the maker of Sapphire glass is about to go through a messy divorce with its partner Apple and already the name calling has begun.

GT Advanced Technologies said it will cut 890 jobs, close an Arizona plant expected to make scratch-resistant screens for Apple and has threatened to pursue legal claims against the iPhone maker while revamping under bankruptcy.

The outfit said that if GT winds down these Apple based operations it will be able to stop its mounting losses and re-focus its resources on the operation of its core business of selling sapphire furnaces and other products.

GT Advanced said it was burning through $1 million a day at the operations it intended to close.

The company said that it has many claims against Apple arising out of its business relationship with Jobs’ Mob.

The company said it could not pursue the unspecified claims at the outset of its bankruptcy, but that the claims would allow GT Advanced to terminate several Apple agreements that it said were burdensome and of no value.

Apple said that it was committed to preserving jobs in Arizona and was consulting with state and local officials on its next steps.

Apple still needs GT to make the glass for its iWatch.

The company has provided only scant details of the cause of its bankruptcy and turnaround plans.  But it appears to have relied a little too much on Apple.

The outfit reached an agreement with Apple last year to transform itself from a supplier of sapphire furnaces to a manufacturer of sapphire for Apple. The iPad maker provided $578 million in funding for the Arizona plant, and GT Advanced agreed to repay the money over five years, starting in 2015.

However in September when Apple indicated its iPhone 6 would use rival Gorilla Glass instead of sapphire material.

GT Advanced asked the bankruptcy court to end 13 contracts with Apple, including a confidentiality agreement that has forced the bankruptcy to be conducted with unusual secrecy.

At the moment GT Advanced would be liable for $50 million for each violation of the confidentiality agreement.