Taiwan’s richest man Terry Gou said on Friday he would cede control of tech giant Foxconn to a committee, leaving the Apple-supplier in uncharted waters while he runs for president.
Gou has been at the helm of Foxconn, the world’s largest electronics assembler, for more than four decades, but has set his sights on becoming Taiwan’s next president.
Those political aspirations come at a sensitive time for a company that is acutely vulnerable to the US-China trade war. Taiwan goes to the polls in January, with the contest set to be dominated by relations with China.
Gou – whose company is China’s largest private employer – is seeking to run for the Beijing-friendly Kuomintang (KMT), although he still has to win his party’s nomination. As that contest intensifies, Gou announced plans to hand the reins at Foxconn to a nine-member committee of trusted lieutenants.
“For the past 40 years of my life, I was like a bull and I fought for Hon Hai,” Gou said at a shareholder meeting Friday, using Foxconn’s official name. “Now I am letting go of Hon Hai,” he said, adding he was now going to “fight for the future of Taiwan.”
“I have decided to fade out of Hon Hai and it’s been decided that the company’s operations will be handed over to the nine-member team in the operations committee,” Gou said at the start of a shareholder meeting, using Foxconn’s official name.
“I have a lot of confidence in them. I think every shareholder can rest assured that they can do better than me,” he added.
Foxconn is the world’s largest contract electronics maker and assembles gadgets for major international brands including Apple and Huawei. The bulk of Gou’s investments are in China, employing more than one million workers in the country where cheap labor helped fuel his company’s meteoric rise.
His foray into politics came in April, when he announced that the sea goddess Matsu had encouraged him to run for the presidency. His chief challenger within the KMT is Han Kuo-yu, a populist local mayor and political outsider who has drawn huge rallies of supporters in recent months.
The KMT primary is expected to be announced in mid-July. Whoever wins will be up against President Tsai Ing-wen, who is running for a second term. She hails from the much more anti-Chinese Democratic Progressive Party (DPP).
Since Tsai’s 2016 election, Beijing has cut communications with her government, ramped up military drills and poached several of Taiwan’s dwindling diplomatic allies because Tsai refuses to acknowledge that the self-ruled island is part of “one China.”
Both Gou and Han have spoken of wanting to reset ties with Beijing. Critics accuse both of being too close to China’s leaders, while Gou’s huge investments in the mainland have raised fears of a conflict of interest.
Because so much of Foxconn’s electronics are assembled in China, the company faces the speartip of ramped up tariffs caused by Washington and Beijing’s trade war. In recent years under Gou, Foxconn has gone on a buying spree, snapping up investments from Japan to India in a bid to diversify from electronics assembly.
But the bulk of his investments remain in China. However, Gou has boasted of his White House connections and has met Donald Trump repeatedly.
Foxconn has vowed to build a US$10 billion display screen factory in Wisconsin, creating 13,000 jobs, with Trump and Gou breaking ground together at a ceremony two years ago. But the project has since been hit by uncertainty over how many jobs will really be created and the huge tax breaks offered to Foxconn.
The company has said plans for the Wisconsin facilities are going ahead as scheduled with mass production set for late 2020. Gou’s rags-to-riches tale is legendary in Taiwan and mimics the island’s phenomenal economic success over recent decades.
In a statement to the stock exchange, Foxconn announced Liu Yang-wei, who previously led the semiconductor unit, as the new chairman. Liu is also a member of the committee running day-to-day operations.
Sun Ming-te, an analyst at Taiwan Institute of Economic Research, said other major Taiwanese conglomerates like Formosa Plastics Group and semiconductor giant TSMC have successfully transitioned to being run by committees after their founders stepped down.
“It will take some time to see how well this model can operate in Hon Hai,” he told AFP.
Gou was born in 1950 in Taipei to parents who had fled the Communist victory in China’s civil war. He studied shipping management in college while supporting himself with part-time jobs.
He started his business in 1974 making television parts with an investment of Tw$100,000 ($3,250 at today’s exchange rates) from his mother and later began producing computer parts – eventually growing to become the world’s biggest contract electronics maker.