You've no doubt heard about the recent alleged demise of drug lord Amado Carrillo Fuentes.
Fuentes is not dead. With a net worth of approximately $25 billion and an annual income of ten billion dollars he's simply way too rich to die. The Outrage investigative reporters have discovered that Fuentes faked his death to escape pursuit by international law enforcement agencies.
The Outrage finally caught up with Fuentes on his island hide-away. He agreed to answer our questions if we wouldn't give too many details about his new home. He's anxious to tell his side of the story. We, in turn, were anxious to learn more about the man that writer Charles Bowden recently described as a "business genius" in a profile for GQ magazine.
Fuentes has managed to build a family-run privately held business into a $200 million-a-week cash cow. He has done this without incurring any debt and without relying on government subsidies.
His business is truly unique, in that all advertising is word of mouth. Not only does Fuentes not seek publicity, but he seems positively averse to it.
During his career Fuentes has focused on innovation. He was the first pharmaceutical distributor to use air transportation to bring his products from Colombia to Mexico, where they are then carried into the US via ground transport. His fleet of chartered aircraft has earned him the sobriquet "El Senor de los Dielos," or Lord of the Skies.
He has also introduced new management structures into the Mexican distribution business, known for its extremely high rate of labor and management turnover. The "federation" is a organizational structure designed to increase cooperation, and decrease needless competition between competing distributors. As Fuentes has been known to say, "Better to partner than to perish".
He is known for an intolerance with failure and harsh treatment of employees who don't successfully complete their assignments. On the more positive side, he has never been sued, either by competitors or his own employees.
He has also pioneered new approaches to dealing with government regulators.
Fuentes is a rags-to-riches story. Born the son of a poor farmer in the Sinaloa region of Mexico, he entered the family pharmaceutical business at a tender age. Fuentes began his career humbly enough, tending a marijuana field in Zacatecas. He showed early promise as a management trainee, and was sent to work as the protege of a major distributor on the Texas border. However, his boss met with an unfortunate end at the hands of FBI agents and Mexican federal police.
Then Fuentes entered another family export firm, and again his employers met with violence or misfortune. Ever resourceful, Fuentes kept moving forward and accumulated an ever growing list of contacts, especially in Colombia.
The following is our conversation with a man many consider almost immortal:
The Outrage: Amado, you have a very successful family business. How have you managed to discourage family dissention?
Fuentes: Well, I had a disagreement with my brother in 1989, but it was resolved when he committed suicide.
TO: Yes, we've heard that he committed suicide by shooting himself in the mouth with 15 rounds from an AK-47. Any other family squabbles?
Fuentes: I did get upset with another relative at my wedding a number of years ago. I have to admit that I lost my temper and he also died. But generally all my family members pretty much see things my way.
TO: We've also heard you have an interesting employee incentive system. Tell us about it.
Fuentes: Well, if a particular distribution deal goes bad I have everyone connected with it killed.
TO: Do you really think that killing employees is the right way to empower them or encourage success? Aren't there alternatives?
Fuentes: Sometimes we torture them first, and then kill them. Occasionally we kill their families. But, one way or the
other, we make it clear that success is job number one.
I know that in the US you often pay incompetent executives huge bonuses or severance payments to get rid of them. Our solution is both more cost-effective and less time-consuming.
TO: How do you deal with government regulation? We've heard it's a real budget-buster in Mexico.
Fuentes: Well, that all depends on how you look at it. We make direct payments to government officials of about $500-800 million annually. You may think that's a lot; some people even call it extortionate. But in the US corporations pay taxes of as much as half of their annual income. Our payments represent much less than 10 percent of our annual profits, so I'm not dissatisfied with the arrangement.
TO: Tell us about the big picture, and how you see the global economy.
Fuentes: Well, it's very interesting. Everything is going more global, and of course the pharmaceutical business has always had an international orientation. About half of our customers are in the US, but most production takes place in South America and Asia. My country, Mexico, earns about $30 billion annually as a pharmaceutical distribution center. That's more than four times the profit from our next biggest export, oil, and we can service the entire government and private sector debt of $160 billion just from our profits as a way station for pick-me-ups.
TO: How do you see the business changing?
Fuentes: I'd like to see more cooperation and less cut-throat competition. I hosted a conference in Puerto Morales where I urged my competitors to stick to retailing, and let me focus on wholesaling. We'd like to maintain some of our retail operations in the US, but generally we're more interested in the wholesale side of the business.
TO: Do you encounter any anti-trust problems with a proposal like that?
Fuentes: No.
TO: Tell us how you deal with trade secrets. We've heard that a fair amount of industrial espionage takes place among competing firms. Do you litigate to try to enforce employment agreements?
Fuentes: We had such a situation recently. A woman was passing along insider information to the government. Her body was later found in a barrel filled with acid. Both of her legs had been cut off. We're very serious about restricting the flow of proprietary information.
TO: What advice do you have for those who might wish to follow in your footsteps?
Fuentes: Smart distributors don't use their own product. Live fast, and don't be afraid of dying young. And never trust your plastic surgeon.
