Foxconn: The Stealth Bomber Of EV Manufacturers Most Won’t See Coming

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When Foxconn held its “Tech Day” event last month, it seems most journalists missed the main point of the presentation. They seem to have taken the same approach as they took with every other EV event. Figure out what car has been announced, get its specifications, and then find other interesting tidbits of information about the vehicles and the company. Tell that story, publish, and then move on to the next story.

This approach makes a lot of sense. Most EV companies are selling (or hope to eventually sell) vehicles under their own brand, designed by their company, and usually built by their company, too. This is generally what gas and diesel vehicle manufacturers have done for a century, so nobody should be faulted for thinking that’s what Foxconn is up to.

The first clue that something very different is going on here is the new EV brand’s emblem/logo:

It’s a cool half-square and triangle logo. It also kind of looks like an “F” for Foxtron. It’s got lots of little squares, which makes it look digital and trendy. But, do you know what else it looks like?

Yep, the B-2 Stealth Bomber (well, technically, it’s more of a “cranked kite” like the B-21, but you get the point). It’s a very deadly machine that can cause absolute devastation (especially if you load nuclear weapons on it), but that’s not what makes it special. The B-52 can carry almost double the weight, after all. The B-1 “bone” bomber is far faster. Obviously, it’s the stealth of the B-2 that makes it special and worth all the money the US military spends on it.

So, why would Foxconn make the Stealth Bomber its logo? The answer to that is what most outlets missed. It turns out that Foxconn is a much bigger player than most people know, because it operates behind the scenes and below the radar. It may look like Foxconn is jumping out to build its own brand now, but the company has made clear that it intends to continue operating in stealth, but expanding to take a big chunk of yet another industry.

Historical Background (Context)

In this case, Musk and Durant are totally right. The effort to dig up quick news and give readers some easy-to-chew mental candy can be profitable and maybe even a little fun, but without context, we can’t really understand anything.

To really understand Foxconn, you have to look at the histories of the countries it developed in, its founder, and the company. I’ll try to make it quick, but because this is a deep dive, we do need to at least cover the basics. This will be a 3-part series.

The Cold War was a time of simplistic thinking. In some ways, it was necessary to simplify messages for propaganda to mobilize democratic countries and keep them from falling to authoritarianism. In other ways, we really missed out on opportunities to make the world a better place. Sadly, Taiwan may be the best possible example of this.

The “communists bad, capitalists good” belief that was prevalent during the Cold War made it difficult for the public to really see some things for what they were. American politicians and intelligence agencies sometimes made allies of some extremely unsavory people whose only redeeming quality was that they weren’t aligned with the Soviet Union. Dictators, warlords, drug dealers, and military juntas have all received US backing over the years.

During World War II, the Chinese communists and nationalists had an uneasy alliance against a common enemy: Imperial Japan. When Japan fell, civil war started. The nationalists lost, and ended up retreating to Taiwan (which Japan lost in the treaty ending the war). The hope was to eventually grow in strength on the island and then retake the mainland.

The United States didn’t want to see the Communist Party take the island over, but they also didn’t want any more war with China after suffering heavy losses to them in the Korean War. So, a stalemate developed, with the communists controlling the mainland and the nationalists controlling Taiwan.

Taiwan’s dictator, Generalissimo Chiang Kai-shek, was about as bad as they came. While he wasn’t a communist, he was a nationalist dictator who ruled with an iron fist. Taiwan wasn’t an empty island when his government, military forces, and loyal Chinese civilians fled there. The indigenous population and the descendants of people who migrated to the island hundreds of years earlier already lived there, and had been under Japanese rule for 50 years. As you can probably imagine, some new guy showing up and taking everything over wasn’t well received.

When people resisted attempts to ban the native languages, deny locals political rights, and do other things, they were repeatedly massacred. Martial law and one-party rule persisted for almost four decades. This period was known as the White Terror.

For the first few years, this brutal authoritarian approach to running a country, combined with corruption and mismanagement of the economy, didn’t work so well. Inflation was rampant, and Taiwan stayed poor. Constant US aid kept the country afloat, both economically and militarily. In Congress, the Generalissimo earned the nickname “General Cash-My-Check” for all of the money he was constantly asking for.

Things started to get better when he banned a semi-feudal landlord system, slowly opened up the economy, gave unions more freedom to organize, and allowed USAID to build the country’s industrial and technological infrastructure up, while improving the education system. These improvements led to the “Taiwan Miracle,” or the country’s rise from a poor country to one of the wealthiest in Asia.

It was during this time that Terry Gou (郭台銘) grew up. His parents had fled to Taiwan with the nationalist government and he was born the next year. The country’s economy really started to improve when he was a teenager. Instead of taking an agricultural job like many people in Taiwan had in earlier decades, Gou took factory jobs, where he learned the ropes.

At age 24 (1974), he took out a loan from family, rented a shed, and hired ten elderly people to work for him making plastic parts for TV sets. He called his company the Hon Hai (literally “great sea”) Precision Industry Company. Later, the company added an English name to help get more business from the United States. They chose the name Foxconn, because the company wanted to be nimble and stealthy like a fox, and they were selling a lot of computer connectors and cables (conn).

As he learned to manufacture electronics, he managed to get an order from Atari to make the joysticks for the gaming console. Building on top of this success, Gou took a daring trip across the United States, cold-calling manufacturers for 11 months. Many turned him away. Some gave him a meeting after he won a receptionist over. Others called security on him and had him removed from the premises because they thought he was being too aggressive.

After putting the work in, he managed to get work doing contract manufacturing for other manufacturing companies, and that’s most of what the company does today.

In Part 2, I’m going to continue the Foxconn story, and explain why it is a serious competitor in the EV industry, even if most people can’t see it today. You can also watch this video to learn more about the company’s history:

Featured image by the United States Air Force (Public Domain).