Why you should care
Because billionaires are like inquisitive children: They need to be appreciated — and watched.
After several high-profile U.S. government bailouts, one more long-standing New York firm hit hard by the economic meltdown received a financial lifeline in January 2009 — the New York Times Company. But while it received a $250 million loan that bleak winter, you probably didn’t catch the name of the doctor administering that critical injection of capital into the ailing old Gray Lady. No, not good ol’ Uncle Sam, but Mexican billionaire Carlos Slim Helú.
Of course, billionaires like Slim, who made much of his fortune in the Mexican telecommunications industry, don’t provide such succor with taxpayer funds or out of the kindness of their hearts. And earlier this year, Slim, 75, whose worth is estimated at over $70 billion, exercised some of the warrants he received in consideration of his loan that made him the Times’ largest shareholder. So far, Slim has shown no discernible interest in influencing the Times’ editorial operations and little inclination to even be interviewed by its reporters (through a representative, Slim likewise declined to comment on this article). Interfering with the content of the Times or other media entities he controls “would not be good for the credibility of that media, so it would not be good for the business,” says Raúl Trejo Delarbre, a researcher at the Institute for Social Research at the National Autonomous University of Mexico. “And Mr. Slim is, above all, an intelligent businessman.”
Slim is a bundle of contradictions.
But like many successful tycoons, the rather stout Slim is also the consummate opportunist, one who has made a considerable living knowing when — as with the Times — it’s shrewd to capitalize on the misfortunes of others. On his way to becoming the second-wealthiest man in the world (after Bill Gates), Slim has dominated the economy of his homeland of more than 120 million people like few dominate a national economy (his net worth being equivalent to about 6 percent of Mexico’s gross domestic product). And his empire of more than 200 companies, across many industries, was built piece by piece.
He started after turning around struggling soft drink and printing companies in the 1960s and ’70s, and then got his first major buying opportunity in 1982 when Mexico nationalized its banks and an economic crisis sent foreign investors scurrying while Slim and others remained, scooping up some of the country’s flagship companies. He struck gold in the early 1990s when his country privatized its telecom industry and his conglomerate Grupo Carso acquired Telmex, the dominant phone company, from the Mexican government. “Slim has an eye for money-losing companies that can be turned around, that is for sure,” one foreign journalist covering Slim’s business in Mexico tells OZY, but “he is not exactly a self-made man.”
The son of Lebanese immigrants, Slim was born wealthy in Mexico City — and a businessman from the start. By age 12, he was buying government bonds; by 15, he was a shareholder in Mexico’s largest bank, and after earning a degree in engineering, the numbers-oriented Slim had made millions as a stockbroker by his mid-20s. His opportunistic streak was inspired by his father, Julian, who died when he was just 13, but who made his own fortune buying up property during the economic strife of the 1910–17 Mexican Revolution. “Firm and patient optimism always yields its rewards; this is also one of my father’s principles,” Slim observes of his own success on his website, which contains a lengthy FAQ section from the effusive but still rather press-shy tycoon.
Personally, Slim is a bundle of other contradictions. He’s well-versed in technology but prefers writing by hand instead of on a computer. He’s a die-hard baseball fan in a land obsessed with soccer, and, by billionaire standards at least, the widower with six children lives a rather modest life, oftentimes with a plastic watch on his wrist and living in a six-bedroom house that’s just a mile from his office. And, of course, he espouses the virtues of competition, despite the fact that so much of his fortune seems to have been built off the lack of it.
The man whom The Wall Street Journal once labeled “Mexico’s Mr. Monopoly” has only recently been the target of tougher regulation, and a new anti-monopoly law represents the first time Mexico has had any real capacity “to regulate the great and very powerful monopolies that we have in telecoms and broadcasting,” says Trejo. Last year, as Mexican authorities were enacting the changes, Slim’s América Móvil controlled some 80 percent of the country’s fixed-line phone sector and about 70 percent of the mobile one. Given the reforms, and with AT&T moving in on Slim’s home turf, América Móvil recently announced it would offer subscribers free calls to, and data within, the U.S.
Indeed, Slim has taken pains to combat any perception that his wealth is built on anti-competitive practices and government favors rather than his own business acumen. And even if he hasn’t gone as far as other billionaires like Gates and Warren Buffett in pledging to give away at least half of his fortune, Slim believes that businessmen must do more than give — they “should participate in solving problems.” Along those lines, Slim has channeled his philanthropy into everything from a genomic medicine research project to numerous arts and education projects in Mexico City, including the Museo Soumaya (named after his late wife), which displays some of his priceless works of art for no admission fee. Some of his philanthropy, however, carries a more political tinge; Slim has been a major donor to the Clinton Foundation and its initiatives.
And despite his good works, says Alejandro Villagomez, a professor at Mexico’s Center for Research and Teaching in Economics, it’s really Slim who remains indebted to Mexico for everything he received from its government during telecom privatization. For the time being, though, many Mexicans will probably just settle for having lower phone bills.