Former chairman, Telmex
Born: 1940, in Mexico.
Education: National Autonomous University of Mexico, BS.
Family: Son of a merchant and realtor (name unknown); widowed (wife's name unknown); children: six.
Career: Grupo Carso, ?–1998, chairman; Telmex, 1990–2004, chairman.
■ Carlos Slim used his holding company Grupo Carso to become involved in a wide variety of economic activities, ranging from telecommunications to retail sales. With a personal fortune that reached $11 billion in 2002, Slim was the richest person in Latin America and one of the wealthiest people in the world. He established a reputation for buying failing companies at low prices and then restoring them to profitability. By the late 1990s Slim had begun to slowly hand the reins of his business empire over to his sons.
Slim was born in Mexico in 1940 to a Lebanese immigrant who had entered the country in 1902. His father enjoyed success as a merchant and then made a fortune in real estate during the Mexican Revolution of 1910–1920. When Slim was 12 years old, his father gave him the equivalent of about $20; he soon found ways to make the money multiply, keeping detailed records of his transactions. By the time Slim was 17, he was already investing in the stock market.
Slim went on to receive a degree in engineering from the National Autonomous University of Mexico and by the mid-1960s was investing in a variety of businesses that became the foundation for Grupo Carso. His conglomerate comprised 30,000 employees involved in activities and products such as mining, manufacturing, paper, and tobacco. After an economic crash in 1982 the Mexican government, defaulting on foreign
debts in light of the devalued peso, began nationalizing banks and scaring business investors away. During this period Slim bought controlling interests in a wide variety of companies at low prices; he then set out to restore those companies to financial health. He managed his investments so efficiently that within a decade their value—and his—had greatly increased.
In 1990 Slim led a consortium that bought the state-owned telephone company Telmex from the Mexican government. Slim's Grupo Carso was the biggest investor in a consortium that also included France Telecom and Southwestern Bell. Slim and his own partners committed to investing up to $10 billion in the inefficient telephone company over the next five years; in exchange for this guarantee Slim was protected from a hostile takeover, in that his controlling shares would be off-limits for the coming 10 years.
Slim was widely credited with transforming the former state-owned company, in part because the $10 billion investment served to modernize the once inefficient utility. However, Slim still had to deal with the bad memories that Mexicans had of Telmex from its days as a government monopoly. He lamented to Julia Preston of the New York Times , "We have a problem between the time you make corrections and the time the public perceives them" (November 14, 1996).
Another challenge Slim faced came about in 1997, when Telmex's monopoly on long-distance telephone service expired, and a series of foreign and domestic competitors sought to gain shares of the Mexican market. Slim and Telmex launched an aggressive, nationalistic advertising campaign against the new competitors. Slim told Preston, "If our competitors are going to be aggressive, we are going to be just as aggressive" (November 14, 1996). Slim was upset by the fact that competitors were allowed by the Mexican government to use Telmex's network at low costs in areas of the country where they lacked their own networks. Nevertheless Slim remained optimistic that Telmex would be able to withstand the new competition, even creating a new holding company called Carso Global Telecom to buy Telmex stock. One analyst commented in the New York Times , "He's putting his money where his mouth is. His view is that Telmex will continue to be the dominant player in its market" (November 14, 1996).
By the late 1990s, Slim began to pave the way for his three sons to succeed him. The transition may have been initiated in part because in 1997 Slim had heart surgery and also suffered from pneumonia. In 1998 his oldest son, Carlos Slim Domit, became the chairman of Grupo Carso. Meanwhile Slim stayed on as chairman of both Telmex and Carso Global Telecom. He spent several years training his sons to eventually take over his vast business holdings, putting his oldest son in charge of a retail chain, while a younger son ran a mining company; he steadily handed increasing amounts of responsibility over to his sons. In 2004 Slim stepped down as chairman of Telmex, retaining the title of honorary lifetime chairman.
Beyond his business dealings Slim became a noted philanthropist and art collector—his collection in fact became so large that he was obligated to open a museum. He also played a prominent role in the revitalization of the historic center of Mexico City and supported anticrime efforts there. In late 2002 he led a group of Mexican businessmen who invited the former New York City mayor Rudolph Giuliani to Mexico's capital to help combat crime. Slim eventually devoted more and more time to the charitable foundations that he created.
See also entries on Grupo Carso, S.A. de C.V. and Telmex in International Directory of Company Histories .
Graham, Robert, and Richard Johns, "Consortium Wins Control of Telmex," Financial Times , December 11, 1990.
Malkin, Elisabeth, "Reins Are Passed, Somewhat, at Mexican Empire," New York Times , May 4, 2004.
Preston, Julia, "Mexican Business Giant Begins Transition to Sons," New York Times , October 15, 1998.
——, "Mexican Retail Conglomerate Buying Rest of CompUSA," New York Times , January 25, 2000.
——, "Mexico's Telephone Revolution," New York Times , November 14, 1996.