Foxconn says it won't run away, but suspicions persist

The topic of manufacturing has attracted particular attention in recent years. The news of "×× ran away" has constantly aroused the public's nerves. Now, Foxconn, which had just been quiet for a while, is popular again.

After the news of Foxconn's joint investment with SoftBank in the United States was exposed, although Foxconn Chairman Terry Gou praised the efficiency of mainland government departments and said he would not leave, there were still constant doubts from the outside world about the company's future investment trends.

Foxconn was once labeled a "sweatshop". To this day, some people still regard this company as the labor-intensive enterprise that was originally engaged in low-end manufacturing, and believe that "emptying the cage and replacing the bird" is its best destination.

Another group of people see Foxconn as a power train that boosts the local industrial economy. No matter which local government, the arrival of Foxconn can be a good medicine for political achievements, driving employment while also driving the vigorous development of cluster industries. Shenzhen Longhua is a good example.

Some people are watching and relying on Foxconn. As the global leader in contract manufacturing, Foxconn is no longer just a weathervane in a single manufacturing field. There are many companies with tens of billions or hundreds of billions of dollars in its upstream and downstream cluster industries.

But for the author, the word Foxconn has another meaning.

A few years ago, I spent a month in the Foxconn Park in Longhua, Shenzhen, which has a population of 400,000. At that time, Longhua gave people the impression that it was a small, densely populated county with convenient living and shopping. People depended on each other through various intricate relationships, such as co-workers, friends, lovers, and family members.

If it weren't for work, as an outsider, I would hardly have noticed that Foxconn was "relocating" at this time. After a series of employee falls, Foxconn announced salary increases twice in a week, but was still caught in the whirlpool of public opinion. Then, the news of relocation to the west began to spread.

But in the Longhua residential area, no one is willing to believe this news. Local workers once told the author that the reason they were unwilling to leave was that they had already regarded this place as their home.

Since Terry Gou established Hon Hai Precision Industry Co., Ltd. in Huangtian Village, Xixiang Town, Bao'an District, Shenzhen in 1988, this city has become one of the favorite places of this Taiwanese entrepreneur. "An open immigrant city has unlimited vitality," Terry Gou explained the reason for the site selection at the time. He said that Longhua will definitely become "a gathering place for manufacturing technology in the world and the forefront of innovation and research and development in the world." Many years later, a miracle really happened. This small factory with only a hundred people in 1993 has become a factory cluster with hundreds of thousands of people today.

You know, it is easy to relocate a factory, but it is not so easy to relocate a factory cluster or even an industrial cluster, or even the workers of a town.

In fact, mature manufacturing factories are often surrounded by an industrial cluster and a mature service system. Workers and industrial clusters will not be motivated to move just because a city can provide preferential land and low labor costs, because a city's supporting services cannot be formed in the short term. This is why China's labor costs are higher than those of Cambodia and Vietnam, but it still remains competitive.

Some people may question whether Foxconn can create another industrial cluster if manufacturing costs converge. Not to mention going to the West, isn't investment happening in India or even the United States?

Cao Dewang, chairman of Fuyao Group, previously spoke the truth about manufacturing costs in China and the United States, such as taxes, electricity, and investment promotion efforts. The United States is indeed now pushing the whole country to restore its status as a manufacturing power, but please note that this does not mean that Cao Dewang has "run away."

Regarding the considerations for investing in the United States, Cao Dewang's original words were: According to the business strategy, Fuyao must have global supply capabilities to survive. Glass manufacturers follow the car factories. Wherever the car factories go, we will follow.

Fuyao's decision to set up a factory in the United States was more based on strategic and capital considerations rather than simply worrying about rising domestic manufacturing costs.

The same is true for Foxconn.

The United States is currently the largest consumer of large-scale TV series products, but there is no large-scale production base related to this. However, Terry Gou recently invested in 10.5-generation 8K displays in Guangzhou, which is a high-tech industry needed by the United States. It is not difficult to see that in terms of industrial upgrading, Terry Gou still regards the mainland as the center of gravity.

From the Pearl River Delta to the Yangtze River Delta to the Bohai Rim, from the southwest to the central and southern parts to the northeast, Foxconn has more than 30 science and technology industrial parks in mainland China, with different missions, but in the direction of transformation and upgrading, Terry Gou's goal is the same. How to shift from traditional manufacturing to intelligent manufacturing with the help of the digital economy? How to accumulate the data generated in the manufacturing process and guide it back to production? How to reconnect and integrate the relationship between suppliers, components, finished product manufacturing, end users, procurement, and after-sales?

It can be seen that Foxconn has been making plans in recent years. In addition to its own transformation and upgrading needs, the company is more focused on the future, such as where the future market opportunities will be.

From the perspective of 8K technology, it is not difficult to see that most of the competitive teams are from mainland China. China already has several LCD panel manufacturers, including BOE Group and Shenzhen Huaxing Optoelectronics, and they are all building new large-size LCD TV panel production lines.

So, for Foxconn, should it leave or not? Should it set up a factory in the United States? In my opinion, this is not a simple question that can be answered in one sentence. In fact, as the most solid achievement of industrialization since China's reform and opening up, Foxconn can be said to be a microcosm of Made in China. It can achieve transformation and upgrading on the spot, which will be the best choice for Foxconn and Made in China.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.