End of an Era: Terry Gou Steps Down as Foxconn Boss
It’s official: Foxconn (TPE:2354) has a new boss.
Terry Gou, Foxconn’s founder and chairman, announced today that he is officially stepping down from the company and handing over the reins as the company’s leader to Liu Yong, the head of Foxconn’s chip-manufacturing group.
The move was not a surprise, as Gou announced his intention to run for leadership of Taiwan’s Kuomintang (KMT) party earlier this year and the company unveiled a leadership overhaul last week with a nine-member operations committee in charge of daily operations. Gou, Taiwan’s richest man, has a net worth of US $7.6 billion, according to Forbes.
Foxconn With No Terry Gou
Gou is leaving at a time when Foxconn faces its most existential challenges. Although the company seems to have the means to weather the US-China trade war, as it announced earlier this month it has the ability to move all iPhone (Apple being its most important client) production out of China, it has a more pressing problem: people aren’t buying electronics, particularly smartphones, like they used to.
Upgrade cycles are the longest they’ve ever been: new phones just don’t have the compelling technological advantage needed to convince consumers to hand over their handsets. Although other types of devices, such as wearables and smart home accessories have grown, there is simply no single new mass market product out there to replace this slump from smartphones’ decline.
Gou made fortunes in China, and will be weighed down by his perceived friendliness to Beijing.
Foxconn is China’s largest private-sector employer with nearly a million employees in-country. Gou has a number of unflattering nicknames in the local press in Taiwan, such as ‘Scary Terry Gou’ or ‘Red Terry’. He is aware of this, and the potential it has to harm his political ambitions, and has come out with a series of hard-line announcements against China. Recently Gou said that he is against a proposed Hong Kong extradition law that triggered mass protests in the City.
Gou has also said that he has no plans to meet with Chinese President Xi Jinping in an official capacity (he has met him before as Foxconn CEO) until China recognizes Taiwan’s official title (the Republic of China, not to be confused with the People’s Republic of China) in the international community. Gou also said that during a recent meeting with Donald Trump he had asked the president of the United States to work on improving the relationship between all three countries.
Local polling in Taiwan shows that Terry Gou isn’t likely to win the KMT leadership primary, losing by a slim margin to Kaoshuing mayor and leadership candidate Han Kuo-yu. However, if Gou were to run directly against incumbent president Tsai Ing-Wen he would have a 10% lead.