In late November 2022, Foxconn planted its flag outside the old General Motors automobile factory in the small burg of Lordstown in Mahoning Valley, Ohio. This is Taiwanese manufacturing giant Hon Hai’s forward base in the North American electric vehicle market. 

The plant has just finished assembling “Endurance” electric pickup trucks for the American startup Lordstown Motors. The Endurance is one of the finalists in the 2023 North American Car, Utility and Truck of the Year (NACTOY) awards. 

“50 orders completed; 500 to go,” says Hon Hai’s chief product officer Jerry Hsiao (蕭才祐).

These 50 trucks are a big deal, because Hon Hai’s first wholly owned auto plant is being run by an outsider who got his start making smartphones. He’s been put in charge of 400 American workers who are all veterans in the auto industry. And so far, he’s doing quite well.

Hon Hai’s electric vehicles roll out!

In fact, what’s happened here is a game changer for Lordstown as well. The old factory has 56 years of history. General Motors used to build their top-selling model, the Chevrolet Cruze, in this very plant. In its heyday, it was one of the biggest automobile factories in North America.  

A loval congressperson dubbed the plant closed down-November 26th, 2018-“Black Monday”. In 2019, the electric vehicle startup Lordstown Motors bought the factory. But it soon found itself in a financial crisis. Hon Hai, which had been actively eyeing the EV market, stepped in. It bought the plant and hired its 400 engineers. 

“The plant is still here and it’s getting an upgrade,” says 66-year-old Fred, a twenty-year veteran of the factory who now drives the shuttle for the local hotel. He calls himself a “car man” and claims to have cried when the plant closed. “Now that we are building electric vehicles, young people in the town can find employment here.”

“The assembly line began ramping up after Hon Hai came to town. I was ecstatic to see the electric pickups roll out of the plant,” says 29-year-old Carlina, an engineer on the motor assembly line. When she started out two and a half years ago, Lordstown was struggling with factory management. “No one felt certain about the future.” She was depressed and thought she’d never see cars roll off the lines.

“This part of the country has developed steel and automobiles in the past. It’s a traditional manufacturing community. It’s in their DNA. Now, Hon Hai has given them a chance to produce electric vehicles,” says local chamber of commerce CEO Crevalle. He feels that the town residents are happy to see manufacturing jobs come back.

The key person behind this change for the better is Jerry Hsiao, an HTC and Motorola veteran brought on board by Hon Hai Chairman Young Liu (劉揚偉).

Smartphone veteran rallies US auto workers

Hsiao’s resume includes ten years of experience at HTC. He also served as the vice president of products at Motorola after it was acquired by the Lenovo Group. Back in the day, when HTC sent its engineers to Google’s headquarters in Silicon Valley to discuss a crucial smartphone-related development project, Hsiao was the project leader. 

His role at Hon Hai is to head the “3+3” transformation strategy. 

After Hon Hai bought the Lordstown plant in May of 2022, Hsiao moved to Ohio from his home in Cupertino, California to oversee operations. 

He is often seen walking around in his gray Foxconn shirt with his name on the lapel. Employees at the plant know him as “Jerry from Taiwan”.

Hsiao is well aware that his lack of experience in the auto sector might be seen as a strike against him. As Hon Hai’s representative in this storied American car factory, gaining the acceptance and trust of his staff is key. 

Right off the bat, there was the question of unions. Unions have a lot of power in American auto plants, and they were frequently a source of conflict within the company.

Hon Hai's plant in Ohio (Source: Elaine Huang)

Abolishing the managers’ dining area and becoming one with the workers

In order to abolish the entrenched pecking order common in many traditional American auto factories, Hsiao ordered the classy managers’ dining area, which boasted furniture made of natural wood and was a relic from the days of General Motors, demolished. He took his meals in the cafeteria with workers on the assembly line.

“You need to eat with your employees and hear what they have to say,” says Hsiao.

Hsiao prioritizes winning the hearts and minds of his workers, because Hon Hai understands the true value of the auto plant is in its workers, not its hardware. “If you want to secure orders, the clients don’t care about what kind of equipment you have; they need a team that’s ready to begin filling orders, pronto.” 

The upper management at this factory includes a senior manager who worked for General Motors for over twenty years, a former Tesla plant director, and another senior manager who worked for the European auto company Stellantis. They are the A-Team that Hsiao needs.

A plant is not its hardware, but its people

One of these valued veterans is Ohio plant production control director Upton, who worked for GM for 26 years before signing on with Lordstown. Eventually, he joined the team at Hon Hai.

“It’s true that building cars is different from consumer electronics, but Hon Hai understands that we understand how to build cars,” says Upton with feeling. “Workers here see new hope when Hon Hai walks in with new customers.”

Part of the deal Hon Hai struck with the Ohio state government when they bought the plant was that there would be no layoffs. 

The factory commands a territory of 640 acres and floor space of 6.2 million square feet. It is on par with Hon Hai’s Longhua plant in Shenzhen. The eastern and western wings are connected by a walkway. Employees traverse the distance in golf carts or on bicycles.

One feature of note is a versatile assembly line designed by Hon Hai. Unlike conventional auto assembly lines with their large-scale robotic arms, this line is safe for robots and humans to work together. Flexibility is key when the orders they get usually are for smaller quantities of highly diversified, bespoke vehicles.

Due to the fact Hon Hai acquired the hardware as well as the talent, it was able to overtake its Japanese and Korean competitors, and it is eligible for the EV incentives that are part of U.S. President Joe Biden’s Inflation Reduction Act (IRA) that goes into effect this January. In addition to Lordstown Motors, there are also orders coming in from electric tractor maker Monarch in 2023, and for Fisker’s EV Pear in 2024. 

It should be noted, however, that these are startups that place small quantities of highly diverse orders. They are hardly enough for the assembly lines at the Ohio plant, which offer a capacity of five to six hundred thousand vehicles a year. According to a report from Goldman Sachs, the plant will need another five to seven new clients if it wants to meet its target.

(Source: Elaine Huang)

IRA will help Hon Hai find new EV business

The 50 electric pickups that have already been delivered are significant, because a new brand like Lordstown Motors also needs the chance to prove its quality. 

“Hon Hai’s success model is reliant on the fact that we pick our customers; we want to be the kingmaker, which means we must choose those who will be kings,” says Hsiao. He also states that startups will not be the only clients they seek.

Because the Ohio plant is immediately eligible for the IRA, there are already inquiries from American, European, Japanese, and Korean automakers. “We only need one or two big customers to bring our factory at Lordstown to full capacity,” says Hsiao. 

“These clients come to us because we have the assembly lines that will help them roll out electric vehicles,” says Upton. He calls this a win-win situation.

Hon Hai is aware that local talent is their best bet if they want to manufacture EVs in America. Beginning in October 2022, Hon Hai teamed up with Youngstown State University (YSU) to prepare to set up an EV training and innovation center. Local students can come work at the plant as soon as they finish their training. 

The North American EV plant is the beachhead. Hon Hai’s next step is to land major customers so they can build more electric vehicles. 

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Have you read?

• Is Hon Hai's US server gambit a threat to Taiwan? 
• Foxconn’s ‘Great Escape’: Could it signal an exodus from China? 
• Taiwan’s ‘hidden champions’ battle to level up

Translated by Jack Chou
Edited by TC Lin
Uploaded by Ian Huang