Apple sticking with Arizona plan after sapphire supplier GT Advanced falters

“Apple Inc. has told officials in Mesa, Arizona, that it’s committed to bringing jobs and manufacturing to the area even after the bankruptcy of GT Advanced Technologies Inc., a supplier that was going to make sapphire screens for iPhones in the city,” Tim Higgins reports for Bloomberg. “”

“‘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,'” Higgins reports. “Mesa, a city of 450,000 on the outskirts of Phoenix, is trying to bounce back after GT Advanced’s sudden shutdown last month of a factory that employed more than 700 people.”

“Mesa and the state of Arizona fought hard to entice Apple to the more than 1.3 million-square-foot factory,” Higgins reports. “Community leaders worked to meet Apple’s demand that the facility use 100 percent renewable energy, and agreed to construct a new power substation for the plant. Apple also benefited from the state’s decision to designate the area around the building a foreign trade zone, cutting potential property taxes by more than 70 percent.”

Read more in the full article here.

11 Comments

  1. I expect that within a few years, employees will be complaining about:

    – low wages
    – long work hours
    – being searched when leaving work

    While the press will be complaining that:

    – Apple got sweetheart tax breaks
    – Apple is “oppressive and burdensome”

      1. Some. Maybe.

        But, in general, if you don’t like your job (pay, hours, procedures), go get a different one. If you don’t like your employer, quit and go find someone you do like.

        And if you think Apple got a sweetheart tax break here, read Bizlaw’s response below. He hit the nail on the head, while you failed to even pick up a hammer.

        That doesn’t make any of what you said wrong, as you clearly indicated that “employees will be complaining” and “the press will be complaining”. But they’ll be wrong for doing so.

  2. This is a perfect example of why I believe that it is wrong for state and local governments in the U.S. to “bid” for new business. First, they are generally not very good at it. Second, they are playing with taxpayer dollars to choose winners and losers. Third, they are short hanging long term local businesses who have supported the local community and tax base over the years, provided steady jobs, and gradually grown. Suddenly a new guy moves in and is granted massive tax breaks?

    Businesses want a stable and reasonable tax environment. Stability enables long term planning. If you want to attract businesses for the long term, reform and simplify your tax policies (notice that I did not specify cutting taxes, although that could certainly be part of the reform as long as the tax revenues covered spending).

    Arizona is very fortunate in this particular case that Apple intends to maintain a presence in this factory. Otherwise their investment would have been wasted.

    1. The problem with your statement is that the factory had been built as a solar panel construction plant that went out of business before it ever really got started with production. So Mesa has this industrial land taken up by a building that is not producing any taxable income (no property taxes being paid, no employee taxes, and no employees spending money in Mesa for lunch, shopping, buying houses, etc.). In addition, it was worse than vacant land because unless a company needed a 1.3 million square foot factory, the building would cost too much to demolish and build a different facility on, so it would just sit for years and years.

      The “sweetheart” deal given to Apple put a completely unproductive, abandoned facility back into use and paying taxes. Now GT Advanced bailed, but Apple is going to keep the facility and make it functional again. This deal does nothing but help Mesa; not having it means a vacant factory decaying and producing nothing.

  3. A foreign trade zone? For gods sakes how many tax dodges are their? How many others states have such a law? Damn, maybe Cupertino could do that, after more all 80% of the city are Chinese and Indian.

    1. Foreign trade zones are intended for places that will be importing and/or exporting around the world. As Apple will be sending sapphire, and/or Apple Watches (made from sapphire) all over the world, this is very appropriate. Keep in mind, they will be paying taxes in whatever country they actually sell these watches.

      1. Property taxes is what we are talking about. Should every company that “might” sell overseas, Apple has not sold anything from this plant yet, be given property tax exemptions? This is truly a sweetheart deal that Arizona taxpayers will pay for. More government handouts to corporations.

  4. What happened to those reports (OK, rumors) that Apple was considering manufacturing Mac Minis or iMacs in the US? Surely this space could be retasked to build Macs. As of now only the high-end Mac Pro is assembled in the US.

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