It was inevitable that Foxconn Technology Group chairman Terry Gou’s Wednesday announcement he’s running for president of Taiwan would invite comparisons to Donald Trump. Both men are brash billionaires who claim their business experience qualifies them for political leadership. Gou has said he was inspired in part by Trump’s example. They share a fondness for baseball caps.
The similarities have been overdrawn. The dynamics of Taiwan’s political system bear little resemblance to those of the United States. And, unlike Trump, Gou runs a $170 billion business that really matters—for Taiwan, the rest of China and the entire global economy.
Global investors seemed chuffed by Gou’s decision to toss his hat into the political ring. On Thursday, shares of Foxconn, formally known as Hon Hai Precision Industry Co., jumped 6%, and the company’s listed affiliates did even better. Taiwan stocks rallied across the board.
Some market pundits speculated Gou would champion a more business-friendly agenda for Taiwan and bring stability to the self-ruled island’s tumultuous relationship with Beijing. Others hailed his personal rapport with Trump, commander-in-chief of Taiwan’s most important strategic ally.
The euphoria is misguided. Gou’s political prospects are uncertain. He has declared he’ll campaign as a member of Taiwan’s opposition party, the Kuomintang (KMT). But to secure the party’s nomination, he’ll have to persuade party stalwarts he’s a better candidate than Han Kuo-yu, the charismatic KMT politician recently elected mayor of Kaohsiung, the southern port city that is a bastion of the ruling Democratic Progressive Party.
Gou is certain to tout his success as a businessman and the extensive network of relationships with Chinese political leaders he has cultivated over nearly three decades of running factories on the mainland. In the political realm, those achievements may prove liabilities rather than assets.
Gou runs Foxconn with an iron fist. Even admirers worry his temperament is ill-suited to a democracy as boisterous as Taiwan’s. Tsai Ing-wen, the incumbent president, homed in on Gou’s imperious management style this week by noting that while he may be accustomed to being “the boss of a big company,” as Taiwan’s president, he’d have “23 million bosses, so you have to adjust your attitude a bit.”
Meanwhile, the vast scale of Foxconn’s operations in China—the company operates factories in a dozen mainland provinces and is China’s largest private employer—create potential for conflict of interest that make Trump’s business dealings in Russia seem trivial.
The more immediate question is who will run Guo’s business while Guo is running for office? Foxconn says Gou will remain chairman but is stepping back from day-to-management. He has no clear successor. The company counts on iPhones, which it assembles for Apple, for about half of its total revenue. But demand for smartphones has peaked and Apple is beset by competitors. The Financial Times observes that Foxconn now faces “more serious challenges than at any time in its 45-year history.” Bloomberg‘s Tim Culpan, who has covered Gou for two decades, points out that the Taiwanese billionaire “remains a hands-on micromanager” and worries that in his absence, “there’s every chance that the underlying businesses would falter for lack of direction.”
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