AMCHAM National Convention; power brokers talk business.

With the nation "at a crossroads," in the words of one executive, government and industrial leaders assembled at AMCHAM'S National Convention in early November, as the president, the region's wealthiest man and an array of experts analyzed how to make Mexico a leaner industrial machine.

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Between addresses by such luminaries as President Fox and billionaire Carlos Slim, players from virtually every major multinational corporation in Mexico rubbed elbows, made deals, voiced grievances and congratulated one another on recent successes.

But at the bottom of it all was a sense of urgency, a belief that the country must implement reform--specifically fiscal and energy--to make it easier for companies to do business.

"Mexico is at a crossroads, it needs to quickly implement some reform in order to keep pace with the leading countries of the world or else it is going to go backwards," said Carlos Bragado, the general manager of United Airlines in Mexico. "Now is a time of action to implement all these things that we have been talking about."

The two-day event aimed to facilitate that, with AMCHAM President James Callahan describing it as "an opportunity to ask political and business leaders face-to-face questions ... and tap the global experience of companies that have dozens, if not hundreds, of years experience in markets around the world. They know what works and what doesn't."

SOCIAL HOUR

The first night of the reunion was highlighted by Fox, who made a highly ceremonial entrance--entering the Hotel Nikko ballroom with a color guard, two Cabinet members, the U.S. ambassador and Callahan at his side--before delivering a cookie-cutter speech on competition.

Executives at tables reserved by corporate powerhouses like DaimlerChrysler, IBM and Union Pacific rose upon the president's entrance, and political opponents such as Institutional Revolutionary Party (PRI) Sen. Silvia Hernandez listened respectfully as the president discussed developments along the border and his expectations for growth in the short term.

His appearance came on the eve of his tour of three southern U.S. states (designed to advance his migration accord) and was squeezed between private meetings at Los Pinos with PRI members, the chief partisan obstacle for the president's reform agenda. Fox met with PRI President Robert Madrazo and Energy Secretary Felipe Calderon in the afternoon and later dined with PRI lower house leader Elba Ester Gordillo as well as several prominent PRI governors.

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Although Fox and the PRI players refused to directly comment on the substance of the meetings, the president reportedly was trying to hammer out some semblance of accord on his fiscal and energy reform packages--the progress of which many say will determine the success or failure of his administration. However, Fox avoided the subject in his brief address, choosing instead to deliver vague sound bites on "the new competitiveness of the Mexican economy" and making uncontroversial vows to continue to fight illegal commerce and piracy and strengthen the maquiladora industry in face of increased competition from China.

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Despite the lack of substance in his address, most guests were pleased with the Fox appearance--as his booming voice and tangible charisma struck a powerful contrast to the days when technocrat Ernesto Zedillo ran the show. The president also opened up lines of communication between his administration and the American business community, asking AMCHAM to deliver a list of resolutions made during the convention.

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The rest of the opening night was spent with executives sipping wine and tequila, while Callahan and U.S. Ambassador to Mexico Tony Garza recognized major companies in the audience. Sen. Hernandez stayed late into the evening, talking with corporate heavyweights over her raspberry tart. Audience members realized that the evening was not one to talk business, as the heaviest corporate player of all was yet to appear.

WORDS FROM SLIM

Sandwiched between a panel of political leaders and a roundtable of CEOs, Latin America's richest man took the microphone and delivered a blueprint for the nation to move forward economically, stressed the importance of education and joked with the audience regarding his own successes.

Media representatives lined the walls and the ballroom filled to near capacity as Slim leaned back in his leather chaise and casually discussed the most relevant fiscal issues of the day before answering questions from the audience. He spoke softly, leading to a hushed silence in the audience and some annoyed whistles at those inconsiderates who refused to turn off their cell phones.

"The gentleman is so influential, you really want to hear anything he has to say," said Leo Lobato Kelly, CEO of Boulder Information Technologies, who came down from Monterrey to attend the convention and made a major networking deal in the process. "Like my mother said, 'Tell me who you hang out with and I will tell you who you are.'"

Slim lamented the lack of growth in the current economy, saying the forecasted 1.5% growth in Mexico GDP for 2003 will hamstring both the macro and micro economies.

"Mexico needs to have sustained development, such that the GDP will double in 25 or 30 years," said the Grupo Carso boss.

When addressing the need for the country to improve its services and modernize its infrastructure, he displayed a graphic on Telmex growth to illustrate his point, drawing laughs from the audience when he said, "This is a bit of propaganda, but it's true."

Want in education was another major point of the UNAM engineering graduate and former professor, as Slim said that Mexico must better educate its youth if it is to keep up internationally, specifically with the software industry of India. "Education gives our people the opportunity to transcend the working class," he said. "We talk about leaving a better Mexico for our children, but I think we should focus on leaving better children for Mexico."

NOT EVERYONE BUYS IT

Although his reception was warm and executives posed for photographs with the mogul, several members of the audience criticized Slim's stance on the need for competition, considering that his empire was built on anti-competitive practices.

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In particular, representatives from telecommunications companies that have been at the mercy of Telmex for years took exception to the billionaire's use of an athlete metaphor, in which he said, "Competition is very important. It would be like you were an athlete and you didn't have anyone to run against. How would you know how good you were?"

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Slim bought the nation's telephone lines in the early 1990s, essentially turning a public monopoly into a private one. Since then, Telmex tenaciously has fought measures to open up the telecommunications market. "It's an oxymoron that he would come and speak about competition when the man is all about eliminating competition," said Lobato. "We have AT&T and MCI and all these other companies, yet the prices still haven't come down because he remains the dominant carrier and has the political influence to keep things the way they are."

Others also questioned the fundamental premise of his speech, in which Slim expressed confidence in Mexico--saying the nation was already competitive in a number of fields and "set up" to remain a powerful international player for years to come.

"I disagreed with that," Jose Luis Newman, founding partner of executive search consultant Amrop International/Echelon, said during a break following Slim's address. "I think the country has a lot to do to be competitive worldwide. I don't think Mexico is competitive enough, particularly when you look at the number of unemployed people that we have."

AGREEMENTS BY THE STAIRWELL 

This open exchange of ideas and networking in the halls outside the main ballroom led to a sense of consensus, particularly on the immediate need for sweeping reform. Support for the viewpoint of Grupo DESC executive Luis Tellez was strong, as the former Energy secretary raved about the need to privatize the oil industry, pointing out, "We are the only major economy in the world that has a monopoly in the production and distribution of gas."

Tellez's remarks were made during a panel in which he was joined by Peter Wiegandt, vice president for Dell Latin America, Luis de la Calle, the president of Public Strategies de Mexico, and Jorge Perez Cordova, president and general director of Kodak de Mexico. Following the panel, Weigandt told BUSINESS MEXICO that this open exchange of ideas between high-powered executives was critical to improving Mexico in the international marketplace.

"An event like this opens the door to change," he said, explaining that the industrial and political powerbrokers who attended the event did not simply take time out of their schedule to sample the overdone steak.

A chance to sit down and discuss reform and government initiatives with one's competitors does not come along very often, he said, and it is important to make the most of it. Wiegandt also shrugged off suggestions that executives were holding back their true opinions or measuring their words in the company of their closest domestic competitors.

"I don't think that inhibits discussion because at the end of the day, the goal is common," he said.

As the National Convention came to a close and the executives strolled

out of the ballroom to return to their respective offices around the country, Adolf Horn, Jr., who headed AMCHAM'S Guadalajara division for more than 30 years, took a moment to reflect on what it all meant. "We all know that Mexico is going through a tremendous transition, and events like this are part of the learning process," said 93-year-old Horn, before spicing his commentary with a bit of slang from the hip-hop culture. "It's all good."

RELATED ARTICLE: SLIM'S 12 POINTS TO INCREASE MEXICAN COMPETITIVENESS

1. Physical security

2. Judicial security

3. Fiscal reform

4. Exchange rate competitiveness

5. Interest rate

6. Improved education system creates more skilled jobs

7. State reform

8. Deregulation and streamlined administration

9. Adjust the consensus position in Washington

10. Better penetration of bank services and financing

11. Modernize the nation's infrastructure

12. Autonomy of state-run businesses and their removal from annual budget process

Matthew Brayman is the editor of BUSINESS MEXICO.