Foxconn IH CEO Terry Cheng quits due to health reasons, Calvin Chih to take his place
With annual revenues of over $100 billion, a net income of around $2.6 billion in 2011, and no less than 1.2 million employees, Foxconn is currently the world’s largest maker of electronic components, but also the largest exporter in Greater China. However, a certain instability seems to be affecting the company also known as Hon Hai Precision Industry when talking about the key people in its management structure.
Just six months after taking up the CEO position at Foxconn International Holdings from Chen Wei-Liang, Terry Cheng has reportedly announced that he himself will be stepping down from the role. Cheng has apparently took this course of action due to health issues that haven’t been made public. However, his “move” is bizarrely similar to Chen’s decision from January, who resigned due to “wanting to spend more time with his family”, which could make people wonder if these resignations are in fact based on personal reasons, or are just made public that way.
Before getting overly suspicious, though, and thinking that Foxconn is in any kind of trouble, you should know that Terry Cheng’s “gig” was not that of CEO of Foxconn Technology Group, but of Foxconn International Holdings, which only works as an investment holding company for the Taiwanese-based electronics mammoth.
As far as Foxconn Technology Group goes, the company is still owned and managed by Terry Gou (or Guo), its founder from way back 1974, and the man that claimed just a while back that the next iPhone “will put the Galaxy S3 to shame”.
Foxconn International Holdings will part ways with Terry Cheng on July 31, and on the exact same day Calvin Chih will be appointed interim chief executive officer. Chih, who’s been with FIH ever since 2005, should then go through a vote of confidence in front of the parent company’s board, which should only be a simple formality, according to a Bloomberg report.
Based on that same report, Chih will take on a coveted leading role at a well-established and financially profitable company, but the perks of the job might be overshadowed by the responsibilities.
First off, it seems that the annual salary of FIH’s former CEO was of NT$3.5 million ($117,000), which is not a whole lot given the pressures of the job. Chih, who’s six years younger than Cheng, will probably not earn a lot more and he will be faced with a couple of major problems.
While Foxconn’s list of clients is extremely rich (in a metaphorical sense of the word, too), including names like Apple, Microsoft, Nintendo, Toshiba, Amazon, Acer or HP, its business might be heading a bit south in the coming months. Nokia, Motorola, and RIM, all part of Foxconn’s customer portfolio, are in serious financial trouble, as you might already know, and at least one of the trio might give up the services of the Taiwan-based company in the close future.
It remains to be seen how Calvin Chih will deal with the difficulties and perks of such a high-powered position and whether Foxconn (the parent company) will continue to be a force to be reckoned with in the technology world. Our guess is it will, given that its “tentacles” are spread from Android to Apple and from Microsoft to Nintendo. What do you think?