Economy

The Next Generation Of Latin America's Top Fortunes

Looking at the heirs of Latin America's major business families, it is the best and worst of times - but it's just about time for them to take charge.

Carlos Slim Domit, eldest son of Carlos Slim Helu, the world's richest man
Carlos Slim Domit, eldest son of Carlos Slim Helu, the world's richest man
Carlos Tromben

SANTIAGO — Eugenio López Alonso remembers the day they took him to visit the palace at Versailles. He was seven, and while other kids that age may have aspired to be astronauts, he began to dream of becoming Louis XIV. Forty years on, the sole heir to Mexico's Jumex fruit juice empire has become his country's great patron of the arts, much like the Sun King himself. Forbes magazine once dubbed him the Mexican Medici.

His family cared little for the arts. His grandfather Vicente López Resines founded La Costeña, Mexico's biggest canned condiments and pickles label. His father Eugenio López Rodea runs Jumex, the firm he founded in 1961, today Latin America's biggest juice producer, with annual sales of over $1 billion, and exports to 16 countries. Eugenio had scant interest in juice or condiments.

On his 22nd birthday, his father said he could have any present he wanted, and he chose a work of art. Then came an art gallery in Los Angeles. By 2001 he had a collection of 1,485 pieces valued at $80 million, the core of what would become the Jumex collection. In the next decade Eugenio became Latin America's most important patron and collector, most recently opening the five-floor Jumex museum in Mexico City.

When the patriarch retires

López Alonso is an extreme case, but illustrates well the public perception of heirs as fascinating, desirable, almost culled-from-fiction personalities. They are also the object of study by management experts who ask: are they good businessmen? Should they enter management, or should such positions go to professionals without blood ties to the founding patriarch?

A study on transitions in family firms by Maximiliano Fernández, Alexander Guzmán and María Andrea Trujillo of the University of the Andes Management School, found that outside management was a boost to productivity. Still, there is no consensus on the question.

Competence and market power acquired by founders are also cited as key productivity factors alongside the complexity a business acquires in time. Family transitions can however come with internecine rivalries and personality clashes. The Costa Rican academic Esteban Brenes notes the problems that come with those founders want to run their empires to a ripe old age, hindering the rise of competent successors.

A case in point, the Paulmanns of Chile. Horst Paulmann, the 78-year-old founder of a retail empire with interests in five Latin American countries is described as domineering. He has written down "the important things" about running a retail business in a little black book, and is reluctant to let anyone participate in running his holdings. Indeed he systematically thwarted his eldest son Manfred's management initiatives in Chile and Argentina, until Manfred resigned his positions and vowed never again to work there while his father was president.

Baptism of fire

In certain conditions heirs can increase their firms' profits, for example if they can cash in on their good name and reputation. This has happened with the Servitjes, heirs to Bimbo bread and pastries, while observers are closely watching the succession to Mexican telecommunications magnate Carlos Slim, who has already delegated top posts to each of his three sons.

Brazil's Votorantime industrial group now has "dozens" of third and fourth-generation heirs aged between 18 and 35. In 2001, CEO Antonio Ermírio de Moraes, a grandson of the firm's founder, decided before retiring that family could only take management positions if they had a proven track record of hard work elsewhere. That policy led some younger members of the clan to become entrepreneurs in their own right, like the 27-year-old Antonio Ermírio de Moraes Neto, founder of the "philanthropic" investment fund Vox Capital.

Votorantime's former CEO Antonio Ermirio de Moraes — Photo: Antônio Cruz/ABr

Founders can write down testaments to lay out how their firms should be run one day, but will the "family pact" last? Horst Paulmann has written that his three children, Peter, Heike and Manfred must form a tripartite board to resolve company issues by majority decisions. In this case at least, the three siblings are said to be close.

The Jumex museum opened on November 19, its inauguration costing a cool $3 million. Eugenio arrived late - three hours late - as is his custom, though 1,500 guests were treated to 1,000 bottles of Moët and Chandon and enjoyed walking on stairs covered with gold leaf. Eugenio López Alonso's Versailles now houses works by Damien Hirst, Jeff Koons and Cy Twombly, among other artists.

His father and cousin meanwhile work every day to ensure Jumex is not swallowed, like some rivals, by a global drinks giant like Coca Cola.

Unfair? Possibly, but to each his own and the López family seems happy with these lines of succession.

Marlene Jaggi contributed to the report in São Paulo, Camilo Olarte in Mexico City, and Luis Mendoza in Santiago.

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Society

What It Means When The Jews Of Germany No Longer Feel Safe

A neo-Nazi has been buried in the former grave of a Jewish musicologist Max Friedlaender – not an oversight, but a deliberate provocation. This is just one more example of antisemitism on the rise in Germany, and society's inability to respond.

At a protest against antisemitism in Berlin

Eva Marie Kogel

-Essay-

BERLIN — If you want to check the state of your society, there's a simple test: as the U.S. High Commissioner for Germany, John Jay McCloy, said in 1949, the touchstone for a democracy is the well-being of Jews. This litmus test is still relevant today. And it seems Germany would not pass.


Incidents are piling up. Most recently, groups of neo-Nazis from across the country traveled to a church near Berlin for the funeral of a well-known far-right figure. He was buried in the former grave of Jewish musicologist Max Friedlaender, a gravesite chosen deliberately by the right-wing extremists.

The incident at the cemetery

They intentionally chose a Jewish grave as an act of provocation, trying to gain maximum publicity for this act of desecration. And the cemetery authorities at the graveyard in Stahnsdorf fell for it. The church issued an immediate apology, calling it a "terrible mistake" and saying they "must immediately see whether and what we can undo."

There are so many incidents that get little to no media attention.

It's unfathomable that this burial was allowed to take place at all, but now the cemetery authorities need to make a decision quickly about how to put things right. Otherwise, the grave may well become a pilgrimage site for Holocaust deniers and antisemites.

The incident has garnered attention in the international press and it will live long in the memory. Like the case of singer-songwriter Gil Ofarim, who recently claimed he was subjected to antisemitic abuse at a hotel in Leipzig. Details of the crime are still being investigated. But there are so many other incidents that get little to no media attention.

Photo of the grave of Jewish musicologist Max Friedlaender

The grave of Jewish musicologist Max Friedlaender

Jens Kalaene/dpa/ZUMA

Crimes against Jews are rising

Across all parts of society, antisemitism is on the rise. Until a few years ago, Jewish life was seen as an accepted part of German society. Since the attack on the synagogue in Halle in 2019, the picture has changed: it was a bitter reminder that right-wing terror against Jewish people has a long, unbroken history in Germany.

Stories have abounded about the coronavirus crisis being a Jewish conspiracy; meanwhile, Muslim antisemitism is becoming louder and more forceful. The anti-Israel boycott movement BDS rears its head in every debate on antisemitism, just as left-wing or post-colonial thinking are part of every discussion.

Jewish life needs to be allowed to step out of the shadows.

Since 2015, the number of antisemitic crimes recorded has risen by about a third, to 2,350. But victims only report around 20% of cases. Some choose not to because they've had bad experiences with the police, others because they're afraid of the perpetrators, and still others because they just want to put it behind them. Victims clearly hold out little hope of useful reaction from the state – so crimes go unreported.

And the reality of Jewish life in Germany is a dark one. Sociologists say that Jewish children are living out their "identity under siege." What impact does it have on them when they can only go to nursery under police protection? Or when they hear Holocaust jokes at school?

Germany needs to take its antisemitism seriously

This shows that the country of commemorative services and "stumbling blocks" placed in sidewalks as a memorial to victims of the Nazis has lost its moral compass. To make it point true north again, antisemitism needs to be documented from the perspective of those affected, making it visible to the non-Jewish population. And Jewish life needs to be allowed to step out of the shadows.

That is the first thing. The second is that we need to talk about specifically German forms of antisemitism. For example, the fact that in no other EU country are Jewish people so often confronted about the Israeli government's policies (according to a survey, 41% of German Jews have experienced this, while the EU average is 28%). Projecting the old antisemitism onto the state of Israel offers people a more comfortable target for their arguments.

Our society needs to have more conversations about antisemitism. The test of German democracy, as McCloy called it, starts with taking these concerns seriously and talking about them. We need to have these conversations because it affects all of us. It's about saving our democracy. Before it's too late.

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