Foxconn plans management overhaul as Chairman Gou seeks Taiwan presidency -source

Foxconn Interconnect Technology

06/06/2019 08:03

* Foxconn to set up committee to help run company -source
    * Committee to include up to 10-11 senior executives -source
    * Corporate reshuffle could overshadow Wisconsin investment
    * Company aims to boost transparency -source

 (Adds committee details, comments from source)
    By Yimou Lee and Jeanny Kao
    TAIPEI, June 6 (Reuters) - Apple supplier Foxconn  2317.TW 
is planning to overhaul its management structure to get more
senior executives involved in the running of its daily
operations, a person with direct knowledge of the matter told
Reuters. 
    The move to appoint a new "operations committee" comes as
Chairman and Founder Terry Gou is seeking to run in Taiwan's
2020 presidential election. He also told Reuters in April that
he planned to step down from Foxconn to pave the way for younger
talent to move up the ranks.  urn:newsml:reuters.com:*:nL3N21X1VE  urn:newsml:reuters.com:*:nL3N21Z151
    The overhaul will mark a major shift in Foxconn's corporate
leadership that has seen 68-year-old Gou hold a tight grip on
the firm's daily operations and strategic decisions.
    "The good thing is it will no longer be a company ruled by
one man and the decisions won't be as dogmatic as they used to
be," the source said. "It will be a co-management model."  
    Investors are keen for any insight into succession plans at
the world's largest contract manufacturer, whose business ranges
from smartphone assembling to panel manufacturing, and what it
means for plans laid out by Gou such as a $10 billion investment
to create 13,000 jobs in Wisconsin and an $8.8 billion display
factory in southern China. 
    Foxconn is already under the spotlight for having failed so
far to meet job-creation targets in Wisconsin, a plan cited by
U.S. President Donald Trump as proof he was reviving American
manufacturing. Reuters reported on Wednesday that Foxconn has
moved more than 150 U.S. jobs to Mexico.  urn:newsml:reuters.com:*:nL2N23A1MC
    Foxconn is set to reveal next week the new "operations
committee" that will give senior executives from its units
greater control, according to the person, who declined to be
named as the news had not yet been made public. 
    The committee, which would be involved in running the daily
operations of various Foxconn units - from Sharp Corp  6753.T 
to Foxconn Interconnect Technology Ltd (FIH)  6088.HK  - would
include Sharp Chairman Tai Jeng-wu, Foxconn CFO Huang Chiu-lien,
and FIH chairman Lu Sung-Ching, the source said.
    Foxconn did not respond to a request for comment. 
    A Sharp spokesman declined to comment, saying the firm does
not comment on Foxconn or its management as Sharp and Foxconn
are independent companies.
    
    INVESTOR CONFERENCE
    While the size of the new committee has not been finalised,
an internal proposal is to include up to 10-11 senior executives
from Foxconn units, the person said, adding the committee would
report to Foxconn's proposed new board.  urn:newsml:reuters.com:*:nL3N22M3AC    
    Reuters reported in May that the firm's chip unit boss, Liu
Young, was poised to replace Gou as chairman.  urn:newsml:reuters.com:*:nL4N22P0XH
    The source said Gou will not sit on the committee. Foxconn
has previously said Gou would be a member of the new board.
    At Tuesday's conference, Foxconn is also set to announce a
plan to hold investor conferences regularly, a move the source
said aims to address long-time concerns about Gou's approach to
transparency, including a lack of precise detail on matters from
investment decisions to succession plans. 
    In the conference, to be led by Liu, Foxconn aims to address
concerns about an escalating China-U.S. trade war, with plans to
use its "globalised" production lines from Southeast Asia to
India to cut its risks in China, the source said.  
    Foxconn will also pledge to use new technologies including 
5G telecoms infrastructure and artificial intelligence to revamp
its manufacturing capability, the person said.
    Shares in Foxconn, formally known as Hon Hai Precision
Industry, have dropped around 24% since Gou announced in April
his plans to run for president. They closed up 0.1% on Thursday,
versus a 0.5% decline in the broader market  .TWII .

 (Reporting By Yimou Lee and Jeanny Kao, additional reporting by
David Dolan in TOKYO; Editing by Anne Marie Roantree and Himani
Sarkar)
 ((annemarie.roantree@thomsonreuters.com; +852 97387151; Reuters
Messaging: annemarie.roantree.thomsonreuters.com@reuters.net))