The talk, which perhaps naturally focused on the financial crisis gripping the U.S., was mostly pleasant, although Slim did get testy when pressed about his personal wealth and monopolistic practices. Here are some highlights:
—Slim urged more flexibility and creativity in dealing with homeowners facing foreclosure, suggesting temporary, interest-only loans as an alternative to seizing a home. “There need to be solutions…that aren’t total punishment,” he said.
—There was much curiosity about Slim’s recent purchase of 6.4 percent of the New York Times’ stock. Many of the ink-stained wretches wondered what Slim saw in newspapers at a time when the industry is suffering through its own crisis. Slim, much to our relief, argued that there will always be a need for quality content regardless of the packaging. “It’s an evolution,” he said of the newspaper business. “The ones that don’t evolve will disappear.”
—Slim took umbrage to any suggestion that his companies were bad for Mexico, lashing out at one reporter: “To think that in poor countries there shouldn’t be strong companies is perverse,” he said. “Why should foreign companies (be the only ones that prosper)…The ideal would be that there were more companies like this.”
—He also turned the tables when asked about monopolistic practices, complaining that Mexican regulators won’t let him run video over phone lines as part of a so-called Triple Play of cable, telephone and Internet service. On the other hand, cable and other phone companies have accused Telmex of charging outrageously high connection costs to hook up to its monolithic network, forcing many would-be fixed line providers out of the market.
El Universal reported today that three U.S. franchisors will expand their franchise networks to Mexico. The franchisors are Seattle-based smoothie maker Emerald City Smoothies (who doesn’t love a good smoothie?), Palm Springs-based water, sewer, and pipe leak repair service company American Leak Detection (we all have leaks), and U.S./India based computer and software training services provider Aptech (which appears to be U.S./India-based).
Home Depot (Mexico) officially opened its 9th store in the State of Mexico on June 24, 2008, as reported in El Financiero today. Led by President and Managing Director Ricardo Saldívar Escajadillo, the report said that Home Depot Mexico currently has a presence in 44 Mexican markets and plans to open 10 additional Mexican stores in 2008, giving the home improvement retailer 75 stores country-wide. Last year, according to the report, the company enjoyed in excess of 10% year-on-year revenue growth of its Mexican operations.
Mexico’s tremendous housing deficit – estimated by the Mexican government to be in excess of 5 million housing units – is likely a significant contributing factor to Home Depot’s success in the country.
The wonderful opportunities for home improvement retailers in Mexico did not become apparent to Lowe’s, which is Home Depot’s principal U.S. competitor, until January 2007, when it finally announced plans to open its first stores in Mexico (3 to 5 stores in the Monterrey area) by 2009. Lowe’s-Mexico is lead by vice president Francisco Fernández, who joined Lowe’s-Mexico after seven years with Total HOME (Grupo Alfa). Total HOME, which operated a 4-store chain of home improvement stores, was acquired by Home Depot Mexico in 2001.
The expansion of U.S. and other international businesses into Mexico continued its rapid pace in the fourth quarter of 2007 and first and second quarters of 2008, including moves by: