Business / Corporate

Terry Gou resigns as Hon Hai chairman to pursue Taiwan presidency, hands reins to Sharp board member Liu

Kyodo

Foxconn’s Terry Gou announced Friday he is stepping down as chairman of the major contract electronics maker formally known as Hon Hai Precision Industry Co. but will remain on its board as he campaigns to become president of Taiwan.

Board members subsequently elected Young Liu, head of Hon Hai semiconductor subgroup Foxsemicon Integrated Technology Inc. and a board member of subsidiary Sharp Corp., to replace Gou on July 1.

Gou, 68, has put himself forward as a potential candidate to represent the main opposition Nationalist Party (KMT) in Taiwan’s presidential election in January.

Speaking at an annual shareholders meeting in Tucheng, New Taipei City, he said a nine-person team headed by Liu will take over hands-on management of the company he founded 45 years ago and that he is confident they will “do better” than he did in running it.

He later told a news conference that despite staying on Hon Hai’s board, he would step aside from overseeing the company’s day-to-day operations and has no intention of resuming the chairmanship in the future.

The charismatic Gou played an instrumental role in developing Hon Hai into a global company, and his departure is certain to have an impact on its future.

In remarks to reporters, he urged Apple Inc., a major client, to move some of its manufacturing plants to Taiwan.

Foxconn faces an immediate challenge amid the protracted trade dispute between the United States and China, as well as the U.S. ban on supplying technological components to Chinese tech giant Huawei Technologies Co. over security concerns.

The South China Morning Post reported earlier this month that Hon Hai had recently stopped several production lines for Huawei phones following reduced orders from the Chinese company. Hon Hai bought struggling Sharp in 2016.

In lengthy remarks that at times resembled a stump speech, Gou said he is ready to lead Taiwan to “take off on a new aviation route.”

The presidential hopeful said reforms are desperately needed as Taiwan’s economic development faces a critical bottleneck caused by political infighting.

Calling himself a “pragmatic entrepreneur,” he promised to use his decades of business experience to rescue Taiwan from the brink of bankruptcy and make it rich and strong again.

At the news conference, Gou further expounded on his political views, including on relations with mainland China and on his past remarks about the failure of Hong Kong’s “one country, two systems” model under which the former British colony was returned to Chinese rule in 1997.

When asked whether he would accept implementation of that model in Taiwan, formally known as the Republic of China, he said Taiwan and Hong Kong are different because Taiwan has its own national flag and its constitution was enacted on the basis that both sides of the Taiwan Strait are of one China.

“The ‘one country, two systems’ is not a key issue for me,” he said. “The key issue is how the two sides of the Taiwan Strait find a new term that both find acceptable.”

While Hon Hai employs about 1.2 million people in China, Gou tried to separate his political ambitions from his business connections there, saying “let business be business, and politics be politics.”

Gou, who has been criticizing arms procurement from the United States, said he has never said Taiwan should not buy any weapons, but rather it should spend more money on integrating modern technology with military equipment.