Terry Gou, the head of a $41bn gadget assembly empire, has stepped back from his role to contest the presidency of Taiwan. Will that disturb the island’s fragile peace with China? Jane Lewis reports.
“The man who made your iPhone wants to run Taiwan,” says The New York Times – and all, apparently, because of a sea goddess. The mercurial founder of electronics giant Foxconn has thrown his hat into the country’s presidential race, claiming that the Chinese sea goddess Mazu encouraged him to “come forward”, all the better to support “peace” across the Taiwan Strait.
Terry Gou, 68, is a huge employer in China, having built his $41bn empire assembling gadgets for Apple, Sony and many others in vast factories spread like “mini-cities” across the country. Renowned for his hard-driving ethos, he hit the headlines in 2010 when more than a dozen Foxconn workers committed suicide, says Bloomberg. In America, where Foxconn is also a big employer, Gou has built a strong rapport with President Trump.
Quite how that will survive him representing Taiwan’s “China-friendly” Kuomintang (KMT) party in next year’s election remains to be seen. Far from bringing “peace”, Gou’s intervention has raised the temperature in the debate about Taiwan’s “fragile relations” with both countries.
Disruption is a speciality
“With one stroke, the tycoon has thrown Taiwan’s political landscape into disarray,” says Kathrin Hille in the Financial Times. Since the Chinese Communist Party claims Taiwan as its territory, Gou’s business ties with the mainland are controversial. Opponents wonder where his loyalties lie. Gou has now resigned from the daily running of Foxconn, but few doubt where the power still lies. Managers there have always feared their founder’s hot temper and unpredictability. “You know we cannot say anything before the master has spoken,” said one senior executive recently.
Disruption has always been a Gou speciality. The son of a policeman from the mainland province of Shanxi, who fled Mao’s communists in 1949, “his is a true rags-to-riches tale”. After cutting his teeth as a shipping clerk, Gou struck out alone aged 23 with a $7,500 loan from his mother and, in 1974, began making plastic knobs for TV sets. “To drum up more business, he went on an 11-month tour of the US in the early 1980s, dropping in on companies unannounced, like a door-to-door salesman,” notes Bloomberg. The tactic worked.
Foxconn rode Taiwan’s export-driven boom, tirelessly expanding into game consoles, personal computers and smartphones, “squeezing out sometimes formidable incumbents in those sectors”, says the FT. Gou’s “fierce personality” helped, but so did his foresight. His pairing of American demand for gadgets with cheap Asian labour was decisive, says Bloomberg. Many manufacturers hesitated to move production to the mainland when it opened up in the 1980s, but Gou acted quickly – he set up his first plant in Shenzhen in 1988, the year Beijing promised not to nationalise Taiwanese investments.
Make Taiwan great again
The question facing Foxconn is, what next? Gou’s $10bn foray into manufacturing in Wisconsin – “which appeared designed to court Trump” – may already have backfired, says Breakingviews. US employees, it seems, are “just too expensive”. If that’s the case, Trump hasn’t noticed. “Terry is the strongest supporters [sic] of my economic plan,” he tweeted last week. “Can’t wait to attend his inauguration ceremony. I love Terry. I love Taiwan. Make Taiwan great again!”
Many Taiwanese may be open to the idea of a businessman running the country, says the FT. But just as many view Gou as a potential threat to democracy. The 2020 election promises to be interesting.