Apple 2.0

Covering the business that Steve Jobs built

This man makes 137,000 iPhones a day

September 10, 2010: 11:16 AM ET

Foxconn's production rate is one of many revelations in a new profile of its chairman

Terry Gou. Photo: Tony Law for Bloomberg Businessweek

"I should be honest with you," Foxconn founder and chairman Terry Gou told Bloomberg Businessweek on the subject of the suicides at his company's massive factory complex in Shenzhen, China. "The first one, second one, and third one, I did not see this as a serious problem. We had around 800,000 employees, and here [in Longhua] we are about 2.1 square kilometers. At the moment, I'm feeling guilty. But at that moment, I didn't think I should be taking full responsibility." After the fifth suicide, in March, Gou says, "I decided to do something different."

After the ninth, Foxconn hired one of the world's largest PR firms, Burson-Marsteller, to devise a media strategy, which included giving Bloomberg Businessweek's Frederik Balfour and Tim Culpan unprecedented access to the factory and a rare three-hour interview with the chairman.

Among the nuggets they brought home:

  • Gou on Warren Buffett ("He's too old"), the uselessness of business degrees ("You can't read a book to learn to swim"), Steve Jobs ("I forced him to give me his business card") and New York bankers who "see the Hudson River and say, 'I'm a king of the world.'"
  • A sampling of Gou's collected aphorisms: "work itself is a type of joy," "a harsh environment is a good thing," "hungry people have especially clear minds," and "an army of one thousand is easy to get, one general is tough to find."
  • That Gou dropped his libel lawsuit against two China Business News reporters who exposed harsh working conditions at Foxconn's iPod factory at the behest of Apple (AAPL) and Hewlett-Packard (HPQ), two of his most important clients.
  • That it's the threat of getting sued that concerns him as he prepares to move some of his production facilities from China to the U.S. "If I can automate in the U.S.A. and ship to China, cost-wise it can still be competitive," he says. "But I worry America has too many lawyers. I don't want to spend time having people sue me every day."

Foxconn, a publicly traded subsidiary of Taiwan's Hon Hai Precision Industry Co., is the world's largest producer of electronics components and China's largest exporter. In addition to Apple and HP, its clients include Amazon (AMZN), Cisco (CSCO), Dell (DELL), Motorola (MOT) and Sony (SNE).

The full Bloomberg Businessweek story, "The Man Who Makes Your iPhone," is available here.

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[Follow Philip Elmer-DeWitt on Twitter @philiped]

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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