GT to cut jobs, wind down sapphire plant; takes aim at Apple

Fri Oct 10, 2014 3:56pm EDT
 
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By Tom Hals and Manya Venkatesh

(Reuters) - GT Advanced Technologies Inc GTAT.O said it will cut 890 jobs, close an Arizona plant expected to make scratch-resistant screens for Apple Inc (AAPL.O: Quote), and suggested it could pursue legal claims against the iPhone maker while revamping under bankruptcy.

"Only if GT winds down these operations will it 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," the company said on Friday.

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

"GT believes that it has many claims against Apple arising out of its business relationship with Apple," the company said in a filing with the U.S. Bankruptcy Court in Manchester, New Hampshire.

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 responded by pointing to its earlier statement that it remains committed to preserving jobs in Arizona and was consulting with state and local officials on its next steps.

Shares of Rubicon Technology Inc RBCN.O, a rival maker of sapphire material, surged about 23 percent to $4.93 on Nasdaq.

"It looks like if GT has its way, they will wind down their sapphire operations, and that’s a positive for the industry generally, and more specifically, as a primary supplier, for Rubicon, too," said Andrew Abrams, an analyst at JG Capital.   Continued...

 
The new Apple Watch is pictured during an Apple event at the Flint Center for the Performing Arts in Cupertino, California, in this file picture taken September 9, 2014.  REUTERS/Stephen Lam/Files