Foxconn game of thrones looms as its king is abdicating

On June 11, for the first time in history, Foxconn Technology Group held an investor relations conference for its flagship company.
That’s the good news. The bad news is what the moment portends: The world’s largest electronics manufacturer is about to be left without a CEO.
It took founder Terry Gou’s pending departure from Hon Hai Precision Industry Co. to face its stakeholders beyond the legally mandated annual shareholders’ meeting. Gou didn’t even bother to turn up, choosing instead to continue his campaign to become Taiwan’s president.
After’s Gou’s departure, Foxconn will have a new chairman, and the CEO role will be replaced by a committee of nine. For the past 45 years Gou has been the sole decider and face of the company. So while this major shift in leadership brings sudden and long-overdue transparency, it also leaves his sprawling company – which spans more than a dozen nations, up to one million workers, and an all-star client list – in the hands of a committee and without a chief.
I’ve long been skeptical about the company and its future, with or without Gou. As the global tech industry faces both a macroeconomic slowdown and the fallout from US-China trade tensions, Foxconn finds
itself caught in the crossfire.
The comportment of the company’s new management now allays some of those concerns. At the investor event and a telephone conference that followed, these executives – many of whom had rarely spoken publicly – succinctly fielded questions about the challenges of running Foxconn in the age of President Donald Trump, the possibility of moving iPhone production out of China, and the company’s need to transform. That’s a refreshing change from the waffling, disjointed answers Gou usually gives to the media.
Still, this doesn’t mean everything is sorted. The debate over Foxconn’s next chairman, which has been raging for more than a decade, continues. Group CFO Huang Chiu-lian, known as Money Mama, was among the names tipped to take control. Heads of various divisions are also being considered.
It’s my belief that Young Liu, currently head of Foxconn’s chip division, will get that job. (Huang isn’t in the running since she won’t be on the new board). Getting the chairmanship, though, doesn’t mean taking Foxconn’s Iron Throne. Rather, this management-by-committee strategy sets the company up for possible infighting among various division chiefs, some of whom are part of that inner circle.
Any executive decision inevitably becomes a question of resource allocation. Since Foxconn is notoriously tight-fisted, divisions will likely need to compete with each other or engage in back-room horse trading to get what they want.

—Bloomberg

Tim Culpan is a Bloomberg Opinion columnist covering technology