Daily Management Review

More than $7 Billion to be Invested in Display Plant in the U.S., says Foxconn CEO


01/23/2017




More than $7 Billion to be Invested in Display Plant in the U.S., says Foxconn CEO
Chairman and chief executive of Foxconn, the world's largest contract electronics maker, Terry Gou said that in an investment that would exceed $7 billion. The company is considering setting up a display-making plant in the United States.
 
Gou was prompted to warn about the rise of protectionism and a trend for politics to underpin economic development after after U.S. President Donald Trump pledged to put "America First" in his inauguration speech on Friday and the plans come after that speech.
 
Gou told reporters on the sidelines of a company event that investment conditions, that would have to be negotiated at the U.S. state and federal levels, are aamong the many factors that would influence Foxconn's proposal to build a display plant, which would be planned with its Sharp Corp unit.
 
The issue of this investment came up when Foxconn business partner Masayoshi Son, head of Japan's SoftBank Group Corp, talked to Gou before a December meeting Son had with Trump, even though Foxconn, formally known as Hon Hai Precision Industry Co, had been considering such a move for years, Gou said.
 
Inadvertently disclosing information showing Foxconn's logo and an unspecified additional $7 billion investment, Son pledged a $50 billion of investment in the United States as a result of the meeting. Saying it was in preliminary discussions to expand its U.S. operations, without elaborating, Foxconn had issued a brief statement at that time.
"Son is a good friend," Gou said, adding that Son had asked for his views about investing in the United States.
 
While the United States is the second-largest market for televisions, it has no panel-making industry, Gou said he told Son. He had also told Son that an investment for a display plant could create about 30,000-50,000 jobs and would exceed $7 billion.
 
"I thought it was a private conversation, but then the next morning it was exposed," Gou said. "There is such a plan, but it is not a promise. It is a wish."
 
He said that depending on land, water, power, infrastructure and other investment conditions, Foxconn would prioritize Pennsylvania where the company already has existing cooperation and operations.
 
Dispelling talk that Beijing may be pressuring Foxconn about its investments, Gou added that Foxconn would also remain active in China.
 
Because Trump has threatened to raise tariffs on imports from some countries, notably China, Taiwan's tech-dominated manufacturers have been nervous about potential U.S. trade policies.
 
In China, where it operates factories that churn out most of Apple Inc's iPhones, Foxconn is one of the biggest employers.
 
The rise of protectionism is unavoidable, Gou further stated.
Gou said that it was clear politics would underpin economic development and uncertainties for this year make it tough to have a very clear analysis and outlook.
 
"The rise of protectionism is unavoidable," Gou said. "Secondly, the trend of politics serving the economy is clearly defined."
 
While addressing an audience of employees and senior company executives at an annual company event, Gou did not directly refer to U.S. President Donald Trump, while making the comment.
 
(Source:www.reuters.com) 






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