Foxconn chairman stepping down amid talks of political bid

Terry Gou, chairman of Foxconn, the world’s largest contract assembler of consumer electronics, speaks to the media after the company's annual shareholders meeting in New Taipei City, Taiwan, Friday, June 21, 2019. Gou said he is stepping down amid speculation he could be planning a presidential run next year. (AP Photo/Chiang Ying-ying)
Terry Gou, chairman of Foxconn, the world’s largest contract assembler of consumer electronics, listens to a question from the media after the company's annual shareholders meeting in New Taipei City, Taiwan, Friday, June 21, 2019. Gou said he is stepping down amid speculation he could be planning a presidential run next year. (AP Photo/Chiang Ying-ying)
Terry Gou, chairman of Foxconn, the world’s largest contract assembler of consumer electronics, speaks to the media after the company's annual shareholders meeting in New Taipei City, Taiwan, Friday, June 21, 2019. Gou said he is stepping down amid speculation he could be planning a presidential run next year. (AP Photo/Chiang Ying-ying)

TAIPEI, Taiwan — The chairman of Foxconn, the world's largest contract assembler of consumer electronics for companies such as Apple, is stepping down amid speculation he could be planning a presidential run in Taiwan next year.

Terry Gou, 68, made the announcement Friday at the company's annual shareholders meeting, where he was surrounded by an enthusiastic crowd while exiting the meeting room.

Foxconn board members elected Young Liu, the head of the Foxconn's semiconductor division, as Gou's successor.

Gou has yet to formally announce his candidacy and he did not mention it at the meeting.

His resignation, effective July 1, is the latest challenge for Foxconn, which has been caught up in the U.S.-China trade war and a U.S. ban on supplying technology components to Chinese tech giant Huawei over security concerns.

Gou told journalists he had urged Apple to move its assembly line from mainland China to high-tech Taiwan, after The Wall Street Journal and other media reported that Apple has discussed shifting some of its production from China with its largest suppliers, including Foxconn. Apple didn't respond to requests for comment about those reports.

"Taiwan holds a very important position in this current U.S.-China trade dispute, in this global economy reform," Gou said. "Taiwan is important for its technologies, geographical location, protection on intellectual property and application of new technologies."

But most analysts believe it would take Apple at least two years to pivot completely away from China because its supply chain for assembling iPhones, iPads and other devices is so complicated.

Investors have been worrying that the next round of China tariffs being threatened by U.S. President Donald Trump will hurt Apple's sales and profit margins. That's the main reason the company's stock price is hovering about 14 percent below its peak reached last October.

Apple is still hoping for a resolution between the U.S. and China that would avert a 25 percent tariff hitting the iPhone and all its other major products.

In a recent letter to U.S. Trade Representative Robert Lighthizer, Apple warned the tariffs would hurt the U.S. economy and hinder its ability to compete against its rivals from China that don't sell their products in the U.S. Those rivals include Huawei and Xiaomi, which already have been gaining ground in the global smartphone market.

Gou recently has seemed to shift his focus toward a presidential bid, most likely for the opposition, China-friendly Nationalist Party. He would be bringing a pro-business and pro-China stance to what is expected to be a crowded field.

Gou ranks among Taiwan's richest people with a fortune estimated by Forbes at $7.8 billion. He says the Nationalists should hold debates to select their candidate.

His candidacy would be the first for a Taiwan business mogul and may appeal to Taiwanese dissatisfied with stagnating incomes who would like to see a different, more business-oriented style of leadership.

Incumbent President Tsai Ing-wen has been hampered by low public approval ratings and a diplomatic embargo imposed by China, which claims the island as its own territory.

However, Gou is likely to face criticism from China skeptics in Taiwan over Foxconn's 12 factories in nine Chinese cities and his close ties to the Chinese government.

Foxconn announced in 2017, to much fanfare, that it planned to invest $10 billion in the U.S. state of Wisconsin and hire 13,000 people to build an LCD factory that could make screens for televisions and a variety of other devices. After waffling earlier this year on the company's intentions, Gou recommitted to the project in February after a meeting with President Donald Trump.

___

AP Technology Writer Michael Liedtke in San Francisco contributed to this story.

People also read these

China's electric vehicle industry shaken by...

Sep 13, 2016

China's electric vehicle industry, a flagship for Beijing's technology ambitions, has been rocked...

Asian markets lower after Wall Street decline

Sep 15, 2016

Asian stock markets were mostly lower Thursday following Wall Street's decline in light trading...

China begins to ease its 2,000-year-old monopoly...

Jan 3, 2017

China has started an overhaul of its salt industry, easing a monopoly that has existed in some form...

Asia shares falter as investors watch dollar,...

Jan 6, 2017

Asian shares are wavering as a weaker dollar discourages investors who are shying away from risky...

McDonald's sells China business in deal worth up...

Jan 9, 2017

Fast-food giant McDonald's is selling a controlling stake in its China business to a group of...

About Us

Frontal Report is an emerging leader in all forms of media. We aim to be the leading news brand for readers around the world.

Contact us: sales[at]frontalreport.com

Subscribe Now!