The Terry Gou I Know Won’t Be China’s Man

(Bloomberg Opinion) -- After almost two decades covering Foxconn Technology Group, the Taiwanese maker of iPhones, one thing I’ve noticed about its founder and chairman Terry Gou is that he’s a pragmatist.

While he regularly expresses opinions on policy, such as taxes, he otherwise leaves politics to politicians. With most of Foxconn’s facilities and workforce in China, the best way for a Taiwanese to get things done there is to stay out of the fray.

Now he wants to be the president of Taiwan. Gou says he’s seeking the nomination of the opposition Kuomintang in order to support peace across the Taiwan Strait. I believe him. And I believe that Beijing probably thinks he’s just the kind of man they need in Taipei. China’s leaders, however, would be wise to keep their hopes in check.

In declaring his candidacy, Gou described his core values as “peace, stability, economy and the future.” That’s the kind of language Beijing wants to hear from a Taiwanese leader: Those are precisely the factors it cites for forcing unification.

Note the lack of reference to distinctly Taiwanese characteristics such as democracy, human rights or free speech. While he hasn’t said so directly, Gou seems to be implying that he’ll be willing to toe Beijing’s line on what path Taiwan should take.

To understand Gou’s calculus, it’s important to understand the KMT itself. Despite attempts at reform, it is still, quite literally, the Chinese Nationalist Party. It tries to garner support from the more local Taiwan populace, but its heart and soul remain in China. To win the KMT nomination, Gou will have to convince the party’s rank-and-file that he’s their man and a better choice than its current superstar, Han Kuo-yu.

Recently elected mayor of the southern port city of Kaohsiung, a stronghold of the ruling Democratic Progressive Party, Han recently made a trip to China, during which local media and politicians fawned over him — an indication that Beijing had given its seal of approval to this new face in Taiwan politics.

As a party outsider, Gou needs to outdo Han, which means playing up his own cross-strait credentials. After all, who better to make deals with China than a man who employs a million workers there?

Yet, the other key trait I’ve noticed about Gou is that he has a knack for letting people believe what they want to believe, without necessarily making promises let alone delivering on them.

Gou is a master dealmaker. Adept at negotiating with politicians — from provincial Chinese officials to U.S. President Donald Trump — he almost always gets his way: tax breaks, a guaranteed supply of labor, maneuvering around environmental rules. In Indonesia, for example, he led Joko Widodo, then governor of Jakarta, to believe that iPhones could be made in the country. That helped propel Widodo into the presidency. But a failure to deliver the incentives Foxconn demanded meant that the factory never materialized.

In Wisconsin, local leaders were so desperate to get a Foxconn factory up and running they agreed to a laundry list of financial demands, and then issued six critical environmental permits in the span of three days, despite polls showing that more than half of the state’s residents were somewhat or very concerned that the plant would have a negative environmental impact.

Now Governor Tony Evers, who beat incumbent Scott Walker last year partly on the back of anti-Foxconn sentiment, says he thinks Gou’s promise of delivering 13,000 jobs will never be kept. Evers wants to renegotiate. Don’t expect Gou to jump back on his private jet to make that happen.

As a businessman, I would expect Gou’s regard for democracy, too, to take a backseat to his desire to get the best deal. But the deal he wants won’t necessarily be the one Beijing has in mind.

Chinese leaders aren’t the only ones who should be wary. Shares of various Foxconn entities initially jumped on the belief that a President Gou would be good for the business. Yet the empire he’s built over the past 40 years has no succession plan and his previous pledges to retire have never come to fruition. To this day, nobody can give me a good answer when I ask “Who would take over?” because Gou remains a hands-on micromanager.

If he were to step away, there’s every chance that the underlying businesses would falter for lack of direction. And with his key client, Apple Inc., facing its own troubles, now is hardly the time for Gou to be distracted. Gou-linked stocks fell on Friday. Whatever his latest deal is, it’s not clear it’ll be good for either investors or Beijing.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.

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