Foxconn International chief quits after less than a year
Less than a year into the job, Cheng Tien Chong, chief executive of Foxconn International Holdings, the world's largest contract handset manufacturer, will retire with more than two years of his contract still to run.
'Cheng has indicated to the company that he wishes to retire as an executive director and chief executive officer due to his desire to spend more time with his family and improve his health condition,' Foxconn International said in a statement last night.
'The effective date of his retirement is still subject to further discussions.'
The company said it was 'finalising' his replacement.
On November 30, 2011, Foxconn International announced its current chairman Samuel Chin Wai-leung would relinquish his position as chief executive on January 1 this year 'due to his desire to spend more time with his family'. Cheng was appointed to replace him from January 1 for a three-year term.
From 2007 to December 31, 2011, Cheng worked for Foxconn International's Taiwanese parent, Foxconn Technology Group, where his latest post was corporate executive vice-president.
From 1997 to 2007, the information technology veteran was the Asia president of Texas Instruments. From 1992 to 1997, he was the China president of Hewlett-Packard.
Earlier this year, Foxconn International warned that its net loss in the first half would be much worse than its US$17.6 million net first-half loss last year, blaming the expected loss on lower sales, lower selling prices and higher costs.
A key reason for Foxconn International's losses was increased wages, which the Taiwanese firm undertook to appease workers after a spate of suicides among its workers, Samsung Financial analyst Lu Chialin told the South China Morning Post last year.
In 2010, Foxconn International came under fire for a series of worker suicides in its Shenzhen manufacturing facilities.
The company's workforce shrank from 126,687 in 2010 to 98,868 in 2011, according to its 2011 annual report. Most of Foxconn International's factories are in China - mainly Shenzhen, Hangzhou, Tianjin, Langfang and Beijing.
It will be difficult for Foxconn International to turn around this year, given that it makes handsets for Nokia, Sony Ericsson and Motorola, which have been losing market share to Apple and Samsung, according to a report by Cantor Fitzgerald.
Hon Hai Precision Industry, the flagship company of Foxconn Technology Group, makes Apple's wildly popular iPhones and iPads.
Foxconn International's market capitalisation was HK$19.8 billion yesterday.
Shares in Foxconn International closed at HK$2.71 yesterday - less than half of its share price of HK$5.62 on April 2, which means it has lost roughly HK$20 billion of market value in three months.