Carlos Slim

Entrepreneur

• Born: January 28, 1940
• Place of Birth: Mexico City, Mexico

MEXICAN INDUSTRIALIST AND BUSINESSMAN

Carlos Slim was listed at number eleven onthe Bloomberg Billionaires Index, with an estimated net worth of $105 billion. Critics accuse him of exercising near monopolistic control over the Mexican economy; Slim responds by pointing to his flourishing companies and the thousands of jobs they provide.

SOURCES OF WEALTH: Inheritance; real estate; media; investments; telecommunications

BEQUEATHAL OF WEALTH: Charity

Early Life

Carlos Slim Helú was born in Mexico City in 1940. His father, Julián Slim Haddad, was born Kahild Yusef Salim Haddad in Jezzine, Lebanon, in 1888. His mother, Doña Linda Helú, was the daughter of Lebanese immigrants. At the turn of the century, Lebanon was part of the Ottoman Empire. In 1902, Slim’s father, a Maronite Catholic, immigrated to Mexico, seeking greater religious autonomy, as did many other Lebanese of that era. Julián Slim Haddad was a successful businessman, operating the Oriental Star line of stores and acquiring real estate.

Carlos Slim was the fifth of six children. Julián gave Carlos lessons in business from an early age, requiring him to record his allowance and expenditures in a savings book. With his boyhood friends, Carlos traded baseball cards, meticulously recording his profits. Carlos opened his first checking account and purchased his first stock market shares when he was twelve. He was an excellent student, and he received his college degree in civil engineering from the National Autonomous University of Mexico in 1961. He worked for several years as an engineer before realizing that his passion was finance. In April, 1966, he married Soumaya Domit Gemayel, also of Lebanese heritage; they would have six children: Carlos, Marco, Patrick, Soumaya, Vanessa, and Johanna.

First Ventures

In a sense, Slim had been preparing for success in business his entire life, learning from his father, reading books on investing by J. Paul Getty and other businesspeople, and dabbling in the stock market. In 1966, he was already worth $400,000. In January 1966, Slim incorporated his first business, Immobiliaria Carso, with the name derived from the first syllables of the first names of Carlos and his wife Soumaya. In 1967, he entered the real estate market, establishing a residential real estate company, Promotora del Hogar, SA, and a construction equipment company, GM Maquinaria. As he earned profits from each business, he used this money to finance new ventures, including a printing shop, a paper company, a copper mine, food sales, and the cigarette manufacturer Cigatam. In 1980, he created a holding company, Grupo Carso, for his various ventures.

Mature Wealth

Like many shrewd businessmen, Slim made his fortune in times of adversity, and two events were particularly significant in the accumulation of his vast fortune. The first event was the near collapse of the Mexican economy in 1982, when the nation defaulted on its debts and devalued its currency. Devaluation resulted in an economic panic, in which the prices of Mexican companies fell sharply. At this time, Slim went on a buying spree. He accumulated shares in the Mexican subsidiaries of Reynolds Aluminum Company, General Tire and Rubber Company, Anderson Clayton, and Firestone Tires. His largest purchases were the Seguros de Mexico insurance company and Sanborns, which would become the largest retail and restaurant chain in Mexico. When the Mexican economy rebounded, Slim was in possession of a conglomerate, in which the companies had greatly increased in value. He duplicated this success in other countries, acquiring shares of Argentinean, Brazilian, and Colombian companies at times of national economic crises. In 2016, Slim positioned himself to profit from the expected rebound of the Spanish economy by purchasing real estate and floundering corporations. He also obtained shares of American companies, such as Saks Incorporated, CompUSA, and the New York Times.

The second event occurred in 1990, when the Mexican government divested itself of its telephone monopoly, Telefonos de Mexico, better known as Telmex. Because Telmex was poorly run, the government seemed to have little idea of the potential profitability of the company’s operations, especially the licensing of cell phones, which at this time was an innovation in the telephone industry. Slim obtained control of the company for less than $2 billion. He immediately overhauled management, instituted employee training, and invested billions of dollars in infrastructure. He devised innovative marketing techniques, such as pairing calling cards with mobile phones. To protect against devaluation, he pegged Telmex’s rates to the US dollar and not the Mexican peso. By 2001, the company was capitalized at $27 billion. In addition, Slim spun off the wireless portion of Telmex into its own company, America Movil SAB de CV, which by 2007 was Latin America’s largest mobile telephone operator, with 143.4 million subscribers and a market capitalization of about $105.24 billion. Slim also controlled Tracfone, an American prepaid cell phone company.

In October, 2008, Slim lent the New York Times Company, in which he already held a substantial number of shares, $250 million in exchange for ten-year notes with warrants on another sixteen million shares of Times stock. This loan generated speculation about the reasons for the transaction. Some observers maintained that Slim simply saw an opportunity to acquire stock that had become devalued. Others, however, argued that Slim was trying to influence one of the world’s most respected newspapers by obtaining the second-largest block of stock in the Times company, exceeded only by the shares of the newspaper’s longtime owners, the Ochs and Sulzberger families. In January 2015, Slim exercised those warrants, which added an additional 15.9 million shares and making him the largest holder of the company's publicly traded shares. This move, however, did not affect the control of the company or the paper as the Sulzberger family controlled in 2015 90 percent of class B stock, which is not publicly traded.

In 2005, Forbes magazine ranked Slim as the fourth-richest man in the world. He continued to increase his fortune during the recession of 2008–09. On March 10, 2010, Slim ranked as the richest person in the world in Forbes’ list of billionaires, with a fortune estimated at $53.5 billion, roughly equivalent to 5 percent of Mexico’s gross national product. Slim owned about two hundred of Mexico’s leading companies; the value of these firms’ stock amounted to about 40 percent of the entire Mexican stock exchange. Slim’s holdings include the bank Inbursa; the Condumex electric company; the CILSA construction company; the Swecomex drilling company; the Star Medica chain of hospitals; financial and insurance companies; real estate holdings, including five hotels; cigarette and bottling manufacturers; airline companies; and a mining company.

Slim has been criticized for having an octopus-like control of the Mexican economy. Some of his critics allege that he obtained control of Telmex through political connections, engaging in “crony capitalism” that enabled him to obtain a vast fortune from the telephone monopoly. Slim responds to these charges by pointing to the productivity of his companies and the 218,000 workers they employ. What cannot be denied is that Slim pursued his business empire with single-minded tenacity and vision.

Despite his unprecedented wealth, Slim maintains a simple lifestyle, living in a modest house in Mexico City, surrounded by the houses of his children. His wife Soumaya died in 1999. Except for some of the priceless art in his house by Bartolomé Esteban Murillo and El Greco, his home is not opulent. His chief passion outside of business is American baseball; the statistical nature of the game apparently appeals to his mathematical mind. He is also an art collector. In 1994, he opened the Museao Soumaya, which contains sixty-four thousand pieces of artwork, including a collection of sculptures by Auguste Rodin. Slim has run several charitable foundations that distributed hundreds of millions of dollars. In 2000, he paid for the renovation of Mexico City’s downtown area, and he has donated 100,000 computers to fourteen hundred Mexico schools. Nevertheless, he has expressed skepticism about direct charitable giving, maintaining that this philanthropy is unlikely to solve the structural problems that create poverty. In 2015, Slim founded Carso Oil & Gas, a Mexican energy company. In 2024, the company announced a partnership with Pemex on the Lakach natural gas project.

Legacy

Carlos Slim is one of the most successful capitalists of the late twentieth and early twenty-first centuries. He has excelled at purchasing undervalued and often mismanaged companies at low prices, applying his financial savvy to improve these firm’s operations, to make them profitable, and to fit his acquisitions securely within his financial empire. He once told a newspaper reporter, “Buying well is a discipline.” Following this advice, he has been able to assemble a large conglomerate of companies. With his relentless business methods, he has dominated the Mexican economy and become one of the richest persons in history.

Bibliography

Camp, Roderic. Mexico’s Mandarins: Crafting a Power Elite for the Twenty-first Century. Berkeley: U of California P, 2002. Print.

Fleishman, Joel. The Foundation, a Great American Secret: How Private Wealth Is Changing the World. New York: PublicAffairs, 2009. Print.

Lakhani, Nina. "Carlos Slim: Biography of Mexico's Richest Man Penetrates 'Cloak of Silence.'" Guardian. Guardian News and Media, 6 Dec. 2014. Web. 31 Mar. 2016.

Laya, Patricia. "Carlos Slim Buys Half a Billion Dollars in America Movil Stock." Bloomberg. Bloomberg LP, 15 Mar. 2016. Web. 31 Mar. 2016.

Shorris, Earl. The Life and Times of Mexico. New York: Norton, 2009. Print.

"Slim's Grupo Carso Inks Deal to Partner with Pemex on Lakach Natural Gas Project." Reuters, 5 July 2024, www.reuters.com/markets/deals/slims-grupo-carso-inks-deal-partner-with-pemex-lakach-natural-gas-project-2024-07-06/. Accessed 30 Aug. 2024.

Sweney, Mark. "Carol Slim Becomes Largest Individual New York Times Shareholder." Guardian. Guardian News and Media, 15 Jan. 2015. Web. 31 Mar. 2016.

Taylor, Jim, Doug Harrison, and Stephen Kraus. The New Elite: Inside the Minds of the Truly Wealthy. New York: American Management Association, 2009. Print.

Wright, Lawrence. “Slim’s Time.” New Yorker. Condé Nast, 1 June 2009. Web. 7 31 Mar. 2016.