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by Spencer Pangborn, Taiwan

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Taiwan's richest man has a bone to pick with Warren Buffet

May 5, 2009 15:21

Guo Tai Ming is Taiwan's richest man. As president of the Hon Hai Industrial Corporation, he built the company from a small plastics manufacturer located in central Taiwan to one of the largest OEM conglomerates in the world. Hon Hai and its large subsidiary, Foxconn, now produce the iPhones, PS3s, Vaios, motherboards, and countless other components found in devices we use everyday.

So when Guo has an opinion, people in Taiwan listen.

Yesterday, he expressed his annoyance at Warren Buffet's decision to invest US$230 million in a Chinese company, BYD.

"Didn't Buffett proclaim that he would only invest in companies that are trustworthy?" Gou was quoted as telling the Chinese language Economic Daily News. "Then why did he invest in BYD which stole commercial secrets from (Hon Hai affiliate) Foxconn?"

When I first read the story it appeared Guo was only miffed that a mainland rival received a substantial cash injection. But further reading tells us there's more to the story.

In June 2006, Hon Hai took BYD to court in Shenzhen, China, for stealing commercial secrets from Foxconn.

Gou said BYD hired more than 400 Foxconn employees and "stole more than 10,000 documents" from the Taiwanese company.

On the surface, the whole scenario appears to be a tiff between competing enterprises. But if you look deeper it only scratches the surface of the dynamic business relationship between Taiwan and China. While some are keen to show smiling faces and shaking hands, the undercurrent of distrust and apprehension cannot be ignored.

The thought of exporting years of manufacturing expertise and knowledge to China frightened many people in Taiwan. However, increased competition means increased pressure on the bottom line. Companies would prefer to keep production in Taiwan to support the local economy, but thin margins make it hard to argue against the decision to gravitate toward lower costs on the Mainland.

So imagine you're Guo and you finally decide to take the plunge to invest in China. You find a local company to partner with, invite the required government officials to the best KTV in town, hand out the red envelopes, get your permits, build the factory, set up the production line, and eventually train hundreds of staff to build computer parts.

Everything runs smoothly for five months. But soon after, a rival factory sets up shop down the road (doesn't that building look familiar?) and offers a higher salary to snag some of your employees. In addition, they've successfully coerced one of your office staff to load a 4GB USB drive with all the company's documents--congratulations, you're officially up the creek without a paddle.

The heart of the matter remains that Guo is perturbed, and in my opinion, with good reason.

Final thoughts

Guo Tai Ming is still Taiwan's richest man, so I don't feel too sorry for him.

Good to see a Taiwanese business leader voice an opinion about dubious dealings across the straight.

I wonder if this will hurt the Hon Hai vs. BYD court case?

Corporate espionage is an acquired taste.

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btyeh

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btyeh says...
As much as the mainland Chinese patriots will hate me for saying this.. but Guo does have a point.

They'r beating us in our own game of capitalism hahah!

May 05, 2009 17:16

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ShiningStar

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ShiningStar says...
I think the scenerio is big out of context. A lot of companies all over the world hire people from different companies to gain advantage in their business. It's been going on for years. They may explore different company copyright techology and develop a better product from that.

Now if we're talking about direct copies,I'm pretty sure the other company wont hold in court.

May 05, 2009 19:39

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About Spencer Pangborn

Spencer Pangborn first moved to Asia to become a popstar but failed, miserably. He is now a marketing specialist and freelance writer based in Taipei, Taiwan. Originally from the Great Lake State, he misses driving in the snow but doesn't miss shoveling the sidewalk. Spencer is co-founder of the Taipei Tech Club, where he socializes with friends to discuss the latest tech news and views around town. Twitter: @spangaroo