CNBC Exclusive: CNBC's Chief International Correspondent Michelle Caruso-Cabrera Sits Down with Mexican Billionaire Carlos Slim
WHEN: TODAY, TUESDAY,JUNE 11TH
WHERE: CNBC'S BUSINESS DAY PROGRAMMING
Following are excerpts from the unofficial transcript of a CNBC EXCLUSIVE interview with Mexican billionaire Carlos Slim. With his telecom empire under assault, Slim, the world's second richest man, speaks out about the future of his company, among other topics.
Excerpts of the interview will run throughout CNBC's Business Day programming today beginning on "Squawk Box" (6AM-9AM ET). All references must be sourced to CNBC.
SLIM ON NEW REGULATION & MONOPOLY:
There's a new telecom law in Mexico - passed a little more than month ago - it's the first true regulatory threat to America Movil, the company slim founded and the key source of his vast wealth. Because he has long been criticized for keeping prices too high through his control of the market, there is speculation the Mexican government could impose price caps on what his telephone companies charge to consumers. He says he's not worried about that. In fact, he thinks that could be a happy outcome.
SLIM: No, for price caps we are very happy because it's an industry that we have get down prices constantly in twenty years and I think it's an industry where constantly, because of the improvement of technology and the volumes of use, prices go down and down and down.
CARUSO-CABRERA: What if they force asset sales?
SLIM: Well, it's not clear which will be the intention. If the intention is the development of the industry--that is what we suppose--it's very important to have investments. If we need to sell some assets to be, also, I am sure at a reasonable price what they would price, and we don't worry about that.
CARUSO-CABRERA: But the profitability of America Movil, I mean, there was an SEC filing saying the new law could have a material effect on the company, right?
SLIM: I don't think so.Profitability is coming from productivity, efficiency, management, austerity and the way to manage the business. I don't think the profitability is any problem. By the contrary, I think, you need to have profitability, especially in this industry to make the investments, the big big investments that this industry needs to develop themselves.
CARUSO-CABRERA: so you don't take it personally, this law?
SLIM: No, no. No, the contrary, it's very important for us that there are definitions.
CARUSO-CABRERA: Do you consider yourself a monopolist?
SLIM: No, monopolist,you know what monopolist means, "the only one." Mono is one. I think that in any business, in any industry, in any competition there is one that is bigger than others, that is faster than other, that is better than others and has a better position than the other one. You don't have any activity economic or human activity where they are exactly the same. You don't have a country or a place or a market where each has 5 competitors has 20 percent each one. Or three competitor has 1/3 each one. Regularly you have a difference between the competitors and the ones who decide the situation in the market are the consumers. The consumers are the ones that having alternatives and they have alternatives for mobile, they have alternatives for fixed telephony. They have alternative for internet. The only area that they don't have alternative is in TV, paid TV and that's what we think will be open for everyone.
SLIM ON LIFE AT #2 & MONEY DOESN'T BUY HAPPINESS
For the last several years Carlos Slim has been ranked number one by Forbes - the world's richest man,peaking well above 70 billion dollars. However, because the shares of his telecom company have fallen in value, in the last month he fell behind Bill Gates. Slim couldn't care less.
CARUSO-CABRERA: Forbes says you're no longer the richest man in the world. Bill Gates is now the richest man in the world. Do you care?
SLIM: shush, it don't matter anything. I have told you many times that.
CARUSO-CABRERA: How do you think about wealth in general?
SLIM: I think it's a responsibility and a compromise.
CARUSO-CABRERA: in what way?
SLIM: well in any way, you need to take care, you need to have the responsibility to… how you invest that,to how you create more wealth, how you have by one side a creation of wealth and the fruit of the wealth that are in the income for the people, through the salaries, through the investments, through the acquisitions you do or by the taxes you pay go for revenues for the people and income and employment.
CARUSO-CABRERA: I'm sure people think about people like you people like Bill Gates, if I were that wealthy I would sleep better at night, my life would be better. What do you say to them?
SLIM: I don't know who say that. I think, I don't know what they smoke, the smoke
CARUSO-CABRERA: what they are smoking?
SLIM: You don't have money,you have stocks of companies, and you have companies work with people working and you have markets, you have competitors, you have regulators, you have to make investments, you have technology evolution, you have to improve what you are doing. You have to work hard.
CARUSO-CABRERA: Still, people are aspirational, right? They'd like to have more money. They think it would make their life better.
SLIM: I think that to think having more money is happiness, they are in the wrong way. I don't know who think that, that having more money is happiness
SLIM ON GIVING BACK & LAUGHING KAZOO PLAYERS:
Because Carlos Slim is so wealthy in a country with still high levels of poverty, he's often criticized for not being philanthropic enough. To those criticisms, he says two things: he's very philanthropic, he just doesn't advertise it. And ultimately the best charity is creating jobs. I asked him if he though the fulfilled his responsibility as a businessman to improving society.
SLIM: I try to do that,yes. And I think that it's not by only by assistance or some kind of assistance and some kind of charity help to solve some problems temporary. But the only way to solve the problems permanently and in a better way and creating high middle classes and middle classes and taking people out of poverty, is giving people education and employment. And to have all this employment, you need to have investments and more investments to create the economic activity because it's with economic activity where you create the jobs.
CARUSO-CABRERA: Recently at the new york public library, there was an event where there were a number of people in the audience who were protesters that laughed at you every time you spoke and then walked out playing kazoos, they felt that your philanthropy
SLIM: I don't worry about this.
CARUSO-CABRERA: you don't worry about what they think?
SLIM: I don't worry,especially if they are organized in some way. no.
CARUSO-CABRERA: What they're saying is they think you donate
SLIM: I don't worry what they say
CARUSO-CABRERA: what about the argument that you do philanthropy because you want to burnish your image make you look better.
SLIM: no, the foundation has since '86. It's a low profile foundation regularly. People doesn't know what we do. We are not advertising anywhere, TV anywhere. What we are doing, most of the people doesn't know and we don't worry about that. And I would recommend you to read "Las Davidas,""Giving" by Khalil Gibran. Please read it.
SLIM ON SIXTY IS THE NEW THIRTY:
An employee is at his or her best when they're in their sixties, that's what Carlos Slim says. That point came up during a discussion about Europe. He said he's extremely supportive of what central banks have done around the world during the crisis but that in Europe the retirement age needs to be higher.
SLIM: let's say talking about Europe. They have a big problem of excess of benefits that are not sustainable. I think they need to… and big unemployment, that is a big social problem.
I think they need to try to move to work, today they are working 35 hours. Now when you talk about 9 to 5, it's five days, eight hours. But with a coffee break and lunch etc,they work seven hours. They are working at most 35 hours. Maybe it's better to work only three days 11 hours and have four days and this way others will work.
The retirement should be older because today people will live, people working today will live 90 years. When you have an industrial economy like in the past where people make to do a lot of physical work and people live less years, it's okay to retire at 65. When you have a society of knowledge and experience and information, at this age is where you are in your best. it's fool to retire at this age. And you don't have the physical work and you have the intellectual work and you are in your best in your 60s.
SLIM ON BEING SUPPORTIVE OF CHEAP MONEY:
One of the greatest controversies in the world right now is whether or not the action of central banks is good or bad. Carlos Slim says it's all good.
SLIM: And when you have a recession all the economies going down or staying down, and the way to stimulate is with lower interest rates, very important to have money available to make attractive investments. Because you have the problem that you have lower demand and that's why people didn't invest. But people are having this opportunity to be financing at very lower rates can have the interest to make the investments that the economy needs to move.
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