Terry Gou must name his successor: iPhone maker Foxconn needs another CEO

Company News

Before Terry Gou received a divine message to run for Taiwan’s presidency, the Foxconn founder said that he had stayed awake at night wondering what he could do for today’s youth.

That’s an admirable sentiment, but doesn’t much help his own shareholders when they need him most. The company’s major client, accounting for half of sales, is facing the biggest challenge in more than a decade. The tech sector overall is wrestling with a slowdown. And a trade war between China and the US puts Foxconn directly in the crossfire.

Flagship Hon Hai Precision Industry Co. reported earnings late Tuesday. The maker of Apple Inc. iPhones posted operating income that didn’t even match the lowest of analyst estimates, dropping 35% from a year earlier. That’s the biggest miss for a March quarter since Hon Hai started reporting consolidated numbers 11 years ago.

The results were bad across the board. Gross margin was the lowest in seven years, and operating margin fell near historic lows. Judging by the stock’s drop Wednesday morning, investors didn’t see this coming any more than analysts.

Gou loves to talk. He is happy to chat about his trip to the White House and meeting President Donald Trump. He loves to ponder what Taiwan needs from a president. He is keen to share his twin passions of charity and cancer research. But what he doesn’t like to discuss are the inner workings of his own $34 billion business.


 In situations like this, a CEO should be on a conference call explaining the situation to investors. Executives would do the rounds of financial media to calm shareholders. Yet Gou isn’t doing that. Hon Hai’s investor relations team offers the scantest of information in a single earnings table sent from a Gmail account.