Foxconn announces leadership overhaul
INTERNATIONAL - Apple supplier Foxconn on Tuesday announced a leadership overhaul that will see more executives involved in the running of its daily operations, as Chairman Terry Gou seeks to run in Taiwan’s 2020 presidential election.
At its first investor conference in Taipei, Foxconn revealed a new “operations committee” that will give nine senior executives from the group’s subsidiaries greater control.
Reuters exclusively reported last Thursday on the overhaul, which marks a major shift in Foxconn’s corporate leadership that has seen 68-year-old Gou hold a tight grip on the firm’s daily operations and strategic decisions.
The move at the world’s largest contract manufacturer also comes after Gou told Reuters in April that he planned to step down from Foxconn to pave the way for younger talent to move up the ranks.
Foxconn on Tuesday told investors it was well positioned to tackle headwind from ongoing the U.S.-China trade war.
“Our production capacity outside China is enough to meet demand from the US,” said a member of Foxconn’s proposed new board, Liu Young-way, also known as Young Liu.
He touted the group’s ability to tackle what he called an “increasingly tough” situation amid the trade war, citing the company’s production bases in 16 countries.
The nine-person committee includes most members from Foxconn’s proposed new board, including Foxconn Chief Financial Officer Huang Chiu-lien and Foxconn Interconnect Technology Ltd Chairman Lu Sung-Ching.
The committee did not include Gou or the chairman of Foxconn’s Japanese electronics unit Sharp Corp, Tai Jeng-wu, who are both members of the new proposed board.
Foxconn did not provide a reason for their absence on the committee.
Two people with direct knowledge of the matter told Reuters that Tai had resigned from the committee to avoid possible conflict of interest between parent Foxconn and its Japanese unit.
On Tuesday, Liu also sought to address investors’ concerns on what the overhaul might mean for plans initially laid out by Gou, including a $10 billion investment to create 13,000 jobs in the U.S. state of Wisconsin.
He said the Wisconsin investment was more important than before, given the trade war.
Foxconn is already under the spotlight for not yet meeting job-creation targets in Wisconsin, an investment cited by US President Donald Trump as proof he was reviving American manufacturing. Reuters reported on Wednesday that Foxconn has moved more than 150 US jobs to Mexico.
TRADE WAR UNCERTAINTY
Foxconn on Tuesday said it will utilize its “global distribution” as well as “localized production” to tackle growing uncertainty amid the escalating US-China trade war.
Liu also vowed to boost its manufacturing capability with new technologies including fifth-generation (5G) telecoms infrastructure, artificial intelligence as well as ultra high-definition 8K technology.
Addressing investors’ long-time concerns about Foxconn’s approach to corporate transparency, the company announced a plan to hold investor conferences twice a year.
Shares in Foxconn, formally known as Hon Hai Precision Industry Co Ltd, have dropped around 20 percent since Gou announced in April his plans to run for president. They closed up 0.4 percent, in line with the broader index.Reuters