Foxconn: From Glory to Struggle, Terry Gou's "Overly Clever Backfires"

Foxconn: From Glory to Struggle, Terry Gou's "Overly Clever Backfires"Gou founded Foxconn in 1988, and with the help of China's opening up and reform, it grew rapidly. The construction of the Longhua Industrial Park became a turning point in Foxconn's development

Foxconn: From Glory to Struggle, Terry Gou's "Overly Clever Backfires"

Foxconn, once the world's largest electronics contract manufacturer, has become a discarded pawn. Terry Gou, the once-spirited entrepreneur, is also facing difficulties, and his "overly clever backfires" have become a warning to the business world.

Gou Made a Fortune in Mainland China, but He Chose to Leave

Gou founded Foxconn in 1988, and with the help of China's opening up and reform, it grew rapidly. The construction of the Longhua Industrial Park became a turning point in Foxconn's development. In mainland China, Foxconn made a fortune and became a Fortune 500 company.

However, Gou chose to build a factory in the United States and made controversial remarks about "feeding mainland Chinese." In reality, he was trying to please the United States. In 2017, US President Trump, in an effort to revitalize American manufacturing, extended an olive branch to Foxconn and invited them to build a factory in the US.

To attract Foxconn, Trump introduced a series of preferential policies, and Gou promised to invest $10 billion in building an industrial park in Wisconsin over the next four years. The local government carried out large-scale demolitions and built a highway for Foxconn.

The American Dream Shattered, the Indian Dream Also Became a Bubble

In June 2018, Foxconn held a grand groundbreaking ceremony in the US, with Trump attending to offer his congratulations. However, when the factory began operating, Gou realized that American workers' wage costs were much higher than in China, and management was very difficult.

With Biden's election as US President, Foxconn received less and less support and lost money every year. Eventually, Foxconn sold two of its headquarters buildings in the US and left the country in disgrace.

Gou turned his attention to India, hoping to recreate Foxconn's glory. He believed that India has a large population, a rich labor force, and huge potential. However, the reality in India was far more severe than he imagined.

India often experiences power outages and strikes, workers have low levels of education, and security is poor. Foxconn's factories in India had low production efficiency and a sharp decline in orders, ultimately leading to bankruptcy.

Foxconn's Struggles Reflect the Brutality of the Business World

Foxconn's experience reflects the mercilessness of the business world. Gou's "overly clever backfires" have also taught people valuable lessons:

• Businesses should be practical and cherish opportunities for development. Don't focus only on immediate benefits and neglect long-term development.

• Businesses should be responsible to their employees and share the joys and hardships with them. Employees are the cornerstone of a business's development and cannot be easily abandoned.

• Businesses should be grateful to society and give back. Businesses cannot develop without the support of society, and they must give back to society and assume social responsibility.

Gou eventually realized his mistake and chose to return to mainland China. He invested 1 billion yuan to build a factory in Henan and provide 50,000 jobs. This may be a reflection of his rethinking, or it may be a way to regain lost market share.

Whatever the reason, Foxconn's experience is worth thinking about. The rise and fall of a company is often related to its business philosophy, management model, and commitment to social responsibility. In today's fiercely competitive and rapidly changing business world, only those companies that uphold integrity and emphasize social responsibility can ultimately succeed.

(The following content is the source of the article)

• Foxconn's Wisconsin plant groundbreaking ceremony receives local government subsidies | Caixin Finance, Caixin 2018-06-29

• India's appeal weakens? Foxconn "returns" to develop new businesses, Global Times 2024-08-10

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