Yahoo Finance Foxconn executive: Make products in the US and sell them to China
Foxconn, the world’s largest electronics contract manufacturer and a major Apple (APPL) supplier, defended its $10 billion investment in the U.S. amid the trade dispute between the U.S. and China.
“If you want to work around customers, to satisfy [their different needs], or take advantage of [the] consumer electronic markets, there are no other places to go but China and the U.S,” said Louis Woo, special assistant to Foxconn Chairman Terry Gou, at the SelectUSA Investment Summit in National Harbor, Maryland, on Thursday.
Woo urges Chinese investors to stop doing business the traditional way — manufacturing in China and exporting to the U.S. “Invest in the U.S. and sell it to China, the consumers in China will love that,” he said. ”If you can’t do manufacturing in the U.S. right away, at least do research and development in the U.S. and then manufacture in China.”
Foxconn’s upcoming Wisconsin facility will be very different from its factories in China, which are known for labor-intensive work and long hours, according to Woo. “The labor cost in Wisconsin is much higher than mainland China,” he told Yahoo Finance. “We have to do something to take advantage of the talent here. Talent here is not cheap labor.”
Woo attributes the Taiwan-based company’s investment in the U.S. to President Donald Trump and his business-friendly policies. Woo also claims Gou had met with Trump several times in the past 14 months and received weekly calls from the White House. Trump is expected to join Foxconn when it breaks ground on its manufacturing park in Wisconsin on June 28.
Foxconn was one of the first foreign companies to respond to Trump’s call to bring factories and jobs back, the company has pledged the largest greenfield foreign investment in the U.S. The huge incentive package Foxconn is getting has also caused some controversy: Wisconsin will offer up to $3 billion in tax breaks to the Taiwanese company over 15 years, setting a new record for tax credits to a foreign company.
Woo also said the trade imbalance between China and the U.S. is an issue that needs to be addressed sooner rather than later. There have been some concerns that iPhones made by Foxconn in China could suffer from the tit-for-tat tariffs the U.S. and China may impose and disrupt the global supply chain. So far, Woo said Foxconn hasn’t seen any substantial impact on its iPhone production in China. He refused to comment on whether Foxconn has plans to manufacture iPhones in the U.S.
At Foxconn’s annual general meeting on Friday, Gou said the company plans to build artificial intelligence labs in the U.S. and replace 80% of Foxconn’s employees with robots within 5 years.
“The war between China and the U.S. is not a trade war— it’s a technology war, as well as a manufacturing war,” said Gou at the meeting.
Krystal Hu covers technology and economy for Yahoo Finance. Follow her on Twitter.
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