Foxconn Chairman Raises Uncertainties About U.S. iPhone Manufacturing Plant

Thursday March 9, 2017 4:31 AM PST by Mitchel Broussard

Uncertainties over Foxconn's manufacturing expansion into the United States have been raised once again, this time following comments made by company chairman Terry Gou, who spoke to reporters at an event celebrating the start of construction on a $8.87 billion display plant in Guangzhou, China (via Nikkei). At the ceremony, Gou told reporters he had just returned from a trip to Washington without confirming if he met with the Trump administration while he was there.

Since the November election, and even before it, the Trump administration has advocated for Apple specifically to make some of its products in the U.S. and not at foreign facilities, leading to multiple reports that Apple suppliers are looking into building large plants stateside. Now, Gou has raised concerns over any of the company's previous U.S. manufacturing plans because he's not sure if the U.S. government can work fast enough to stay ahead of all of the work needed to be done before any company like Foxconn can build a successful, large-scale facility in the states.

"I am concerned as to whether the U.S. can resolve all the investment issues in only a few months' time," Gou said, adding America also lacks the skilled labor and comprehensive supply chain the display industry requires.

"Does the U.S. offer incentive programs for foreign investors? They'll need to pass bills first, and we'll need to wait for American authorities to make a decision first," Gou said.

Ultimately, Gou tried to avoid strictly siding with one country or the other, saying that the best course of action would be to support both once the option became available. "I am not willing to choose between [the U.S. and China]. Why should I give up on any market?" Gou ended the line of questioning from reporters with a pledge for the governments of both countries to avoid a trade war and "get along peacefully."

"It is in the interest of the entire humanity that China and the U.S., the top two economies in the world, can get along peacefully," Gou said. "They are in the process of gambling with each other, and I can foresee that the two will eventually work together to grow [their] economies and deliver beneficial outcome for many. If they don't, then everyone will be losers."

In a separate report from Reuters, Foxconn is now said to have lost ground in its bidding for Toshiba's memory chip business "due to its close ties with China." The Japanese government is worried about "the transference of key technology" if a winning bidder has a close relationship with China, and Toshiba executives are reportedly aware of the government's wishes and "will take into account how close bidders are to China in the selection."

Apple accounts for over 50 percent of Foxconn's total revenue, and because of lukewarm demand for the iPhone 7 in 2016, Foxconn saw its first ever profit decline since the company went public 1991. Optimism has now surrounded the company's 2017 outlook, however, due mostly to excitement for the debut of the "iPhone 8," perhaps called the "iPhone Edition."

Note: Due to the political nature of the discussion regarding this topic, the discussion thread is located in our Politics, Religion, Social Issues forum. All forum members and site visitors are welcome to read and follow the thread, but posting is limited to forum members with at least 100 posts.

Tag: Foxconn

Top Rated Comments

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40 months ago
Duh.
I've ALWAYS said this.
Foxconn's largest facility employs 400,000 workers.
Where would they put that in America & who would work there??
It's not feasible! Ok... imagine they found a place near Los Angeles to put it (unlikely); they'd still need to hire one in eight of EVERY SINGLE resident, just to run the place! Get real.
Not to mention what they said about not finding people accustomed to/fit for that type of labor.
There, it is a badge of pride to work those jobs & do so meticulously.
Here, that's considered garbage "menial labor" & people do those type of jobs begrudgingly, & at the lowest amount of quality they can skate by with, whilst keeping their job.

We DO need new industries & new jobs in our country...... but NOT these type of factory jobs.

Make American Great Again meant pre- industrial revolution????!
Score: 16 Votes (Like | Disagree)
Avatar
40 months ago

We DO need new industries & new jobs in our country...... but NOT these type of factory jobs.

Make American Great Again meant pre- industrial revolution????!

Foxconn would also have to deal with all those pesky environmental hurdles foisted on them by the EPA.

{EPA being slowly dismantled}

Pre-industrial devolution it is. :D
Score: 8 Votes (Like | Disagree)
Avatar
40 months ago
Oh please. Greed is why you don't want to be here.
Score: 7 Votes (Like | Disagree)
Avatar
40 months ago

Oh please. Greed is why you don't want to be here.

You mean a company doesn't exist to provide you things for no profit?! Next you'll tell me that people expect wages!
[doublepost=1489069349][/doublepost]

Building a large scale plant in the US requires 100's if not 1000's of engineers, the US just doesn't have them.

Congrats to people on their SJW degrees, I'm sure the pay and befits are great at Starbucks and all, but maybe people should have put in some work, and gone into a field that is needed in the real world.

Get back to me when huge portions of the American population stop expecting to make a comfortable living with nothing more than a middle school diploma. It's not people with SJW degrees, it's people with ridiculous expectations of reliving "the old days" and their sustained attacks on anyone who dares to try to get an education.
Score: 6 Votes (Like | Disagree)
Avatar
40 months ago

Foxconn is well known for breaking promises:
The Trump administration, as well as his supporters, are getting played.

The Trump administration, as well as his supporters, are getting played... by Trump.;)
Score: 5 Votes (Like | Disagree)
Avatar
40 months ago

What makes both of you think Foxconn / Apple make such an enormous factory in US to build the entire product line?

For many reasons the first plant would be modest sized, located in an area with a large labor pool (NE looks ripe), and produce a top-of-line product where the higher product costs are offset by higher price.
Also, it will only supplant main production, not replace it.

Of course it will be challenge, but doable.

Also: regardless of how skilled the labor pool is, there will be some amount of training to assemble iPhones.

That's assuming that consumers are willing to pay that higher price, which seems to go against just about every buying behavior of American consumers who turned to WalMart for low prices, bought clothes that were made in Indonesia because they were cheaper, and made sure Toyota sells more cars here than one can imagine.

In the end, people can talk a lot about how they want "hardworking Americans to be making things again" as an empty platitude, and then vent their faux outrage at a ballot box, but when the chips are down, they choose the cheaper option with their wallet, and those big morals suddenly look pretty flimsy in the face of parting with cold, hard cash.
Score: 4 Votes (Like | Disagree)

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