Terry Gou, the chairman and general manager of Apple’s contract manufacturer Foxconn, has urged the California firm to move manufacturing out of China to neighboring Taiwan.
Doing so would help shield it from tariffs from the US government’s trade war with China. “I am urging Apple to move to Taiwan,” Bloomberg quoted Gou as saying. Speaking about whether Apple would likely move manufacturing from China, Gou said he thought it was “very possible.”
Of course, moving its production lines out of China and picking Taiwan as as a new location would inevitably put Apple at odds with the Chinese government and cause major political tensions because China believes Taiwan is part of its territory.
The story corroborates a Nikei report earlier this week alleging Apple might be going through the process of shifting between 15 and 30 percent of its manufacturing out of the 1.34 billion people country. It apparently has an internal team looking at options and has already reached out to suppliers Foxconn, Wistron and Pegatron to evaluate available options as well.
In a letter to US Trade Representative Robert Lighthizer dated June 17, Apple warned that Trump’s proposed tariffs of up to 25 percent would hit all of its major products, including iPhone, iPad and Mac.
An excerpt from the letter:
US tariffs would also weigh on Apple’s global competitiveness. The Chinese producers we compete with in global markets do not have a significant presence in the U.S. market, and so would not be impacted by US tariffs. Neither would our other major non-U.S. competitors. A US tariff would, therefore, tilt the playing field in favor of our global competitors.
Apple is urging the US government not to proceed with the tariffs.
Gou, the founder of Foxconn, the largest private employer in China and Apple’s biggest supplier, told Reuters in April he would be stepping down. He said he planned “to walk back to the second line or retire” and pave the way for younger talent to move up the company’s ranks.
“I will be involved in the major direction of the company, but not involved in daily operations,” the billionaire told the news gathering organization. “I’m already 69 years old. I can pass down my 45 years of experience. That’s the goal I set up—to let young people learn sooner and take over sooner and to replace my position sooner.”
Today, the company announced Gou’s replacement and its new boss, Young Liu, who will step into the role of chairman beginning July 1, Bloomberg has it. Meanwhile, the departing Foxconn chief is planning to run as a candidate in the 2020 presidential election in Taiwan.
Gou started Foxconn with a loan from his mom nearly four decades ago.
Image: A model displaying an airport at Foxconn’s iPhone city in Zhengzhou