Terry Cheng resigned from Foxconn after less than one year as CEO. (File Photo/CFP)
Foxconn International Holdings has been unable to recover ever since its CEO Terry Cheng announced his stepping down in early July, according to an article from the China Times, our sister newspaper, on China Business, a business website based in Beijing. Foxconn, the world's largest contract manufacturer of consumer electronics, is the better-known subsidiary of Taiwan's Hon Hai Precision Industry and is the leading producer of Apple's iPhones and iPads at its factories in China.
Despite having a staff of more than 1.2 million people, Hon Hai chairman Terry Gou nevertheless lost two highly capable managers in just a little more than six months: first Tiger Tesco chairman Jia-Bin Duh, then Terry Cheng.
Without a successor from his family to take over the reins in due course, Gou began to look for a professional manager for his massive company. It was during this search that he found Terry Cheng, who had retired from Texas Instrument Asia and was former president of Hewlett-Packard China. Cheng took over the post as CEO of Foxconn, the report says.
Cheng entered Foxconn in early 2011 with the ambition to oversee a renovation of the company, but decided to quite in less than one year. One insider said it was because Gou and Cheng argued over the strategy of developing Hon Hai's own brand of mobile phones. To ensure Foxconn's OEM core business was not affected, Gou had to dismiss Cheng. A source close to Cheng said that Cheng stressed that Gou's plan of accelerating the transition of Hon Hai through the placement of professional managers such as himself and others has failed.
In early 2000, Gou made a decision to let Foxconn enter China's electronics distribution channels, hoping through five channels — Media Market, Gan Chuang Digital Shop, Cyber Digital, Tiger Tesco and Wan Ma Galloping — they could show their strong ambition to become a player in the vast domestic market.
Despite the setback, Hon Hai's revenues in 2011 reached US$117.514 billion, with a profit margin of 2.36%, four times the amount made by for Chinese PC maker Lenovo revenues and with a profit margin 0.76% higher.
Terry Cheng 程天縱
Jia-Bin Duh 杜家濱
Terry Gou 郭台銘