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Recent Press Releases (U.S. and international) for magazine issues and staff changes may be found below. Please note that for many issues there exists only a highlights sheet, while for others there may also be a full press release. The cover of FORTUNE's current issue is pictured at right. Please contact the appropriate communications staff member with any questions.
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Highlights of the August 20, 2007 Issue of FORTUNE
COVER STORY: MEET THE NEW RICHEST MAN IN THE WORL, by Stephanie N. Mehta, page 22 Portly and often puffing a cigar, Carlos Slim could pass for a latter-day Latin American J.P. Morgan. But with his dominant stakes in everything from phones to finance, his business profile more closely resembles that of John D. Rockefeller, who likewise thrived in a loosely regulated environment. From the time they were young, Slim, a onetime math instructor, wanted to instill in his sons the same lesson his father — a Lebanese immigrant who started acquiring real estate in Mexico City during the Revolution of 1910 — taught him: Though Mexico will have its ups and downs, don’t ever count the country out. But Slim wasn’t just teaching, he was buying. Now those early investments are paying off big time. His three heirs — Carlos Jr., 40; Marco Antonio, 39; and Patrick, 38, run day-to-day operations at various Slim businesses and are increasingly making strategic decisions, while their father, who had heart surgery in 1997, pulls back. And Slim’s investments in downtrodden Mexico? They laid the foundations of a sprawling $150 billion business empire whose growth in recent months has turned him into the world’s richest man. By our calculations, the 67-year-old Slim has amassed a $59 billion fortune, based on the value of his public holdings at the end of July. This number puts him just ahead of perennial No.1, Microsoft founder Bill Gates. This is FORTUNE’s story of how one man set out to conquer a country — and is grooming his three sons to finish the job. WHY THE PRIVATE EQUITY BUBBLE IS BURSTING, by Shawn Tully, page 30 It’s looking more and more as if the private equity phenomenon was a classic Wall Street bubble. It brought unprecedented riches to investment banks, minted a flashy new generation of billionaire Masters of the Universe, and bestowed a magical aura on leveraged-buyout specialists like Carlyle and KKR. And now the bubble’s bursting. Loans will go bad, deals will be canceled, fortunes will be lost. We’re witnessing the unwinding of the whole dynamic that propelled the stock market (not to mention Manhattan real estate prices) to record highs. Alarm bells are ringing. The bursting of the bubble will inflict broad damage. The cascade of private equity deals will slow to a trickle and the firms that vastly overpaid for their targets at the peak of the frenzy in the past two years — when, by the way, most of the deals were done — will deliver extremely low returns to pension funds, university endowments, and wealthy families that invested in them in recent years. The private equity saga follows a timeless template of financial frenzies. FORTUNE reports on why this bubble is bursting. CERBERUS: INSIDE THE WALL STREET POWERHOUSE, by Katie Benner and Geoff Colvin, page 37 Chrysler is becoming American again, being bought from its German parent by Cerberus Capital Management, a buyout firm that it’s safe to say most of Chrysler’s employees, dealers, and customers had never heard of until the agreement was announced a few months ago. Founder and chief Stephen Feinberg has shielded his firm, which is named after the mythical three-headed hound of Hades, from the press for 15 years. But the spotlight is unavoidable: Cerberus’s portfolio companies now generate revenues of more than $60 billion a year and employ about a quarter-million people, including 80,000 at Chrysler, a company that’s in the news every day and that does business with consumers across America. The historic deal (which was within hours of closing as FORTUNE went to press) vaults Cerberus to a new level of fame and prominence in the U.S. economy. It also ties the fortunes of Chrysler and its ecosystem of suppliers and dealers to the increasingly troubled world of private equity, which is being dented by rising interest rates and a nasty credit crunch. Cerberus differs markedly from its competitors in many ways, especially in its willingness to take on companies in peril. With Chrysler, Cerberus will succeed or fail more visibly than ever. FORTUNE gives an inside look at the Wall Street powerhouse. CATERPILLAR, by Alex Taylor III, page 48 Big trucks, big sales and big attitude. Big Yellow is thriving. The largest heavy equipment manufacturer in the world — No.2 Komatsu is less than half as big — Caterpillar makes machines that excavate mines, clear forests, and build highways and bridges, plus the engines that power them. In the most recent quarter, weak construction activity in the U.S. sent profits down 21%. Even so, Cat has been on a great run over the past five years, reveling in a global moment — booming commodities, infrastructure-hungry markets, and a weak dollar — precisely suited to its strengths. Caterpillar prides itself on being the biggest, the best, the most ethical, and even the coolest — the Cat cap has become an emblem of urban chic. Its factories, however, win few awards for efficiency and productivity. So Caterpillar is launching a major effort — its third since 1985 — to raise its manufacturing game. If the effort fails, the risk is that Caterpillar goes down the same disheartening road as General Motors — becoming another iconic American company with dominant presence that failed to step up in terms of manufacturing innovation and performance, allowing other competitors to chew into its markets. FORTUNE explores the big risk and asks: Will the wheels fall off? COULD THE YANKEES BE SOLD?, by Jon Birger and Tim Arango, page 56 Where is George? It’s the question on the lips of many New York Yankees fans this year, as the most renowned franchise in American sports stumbles through a season that could wind up as its most disappointing in 50 years. A team loaded with All-Stars and future Hall of Famers, the Yankees were seven games behind the first-place Boston Red Sox at the end of July. Yet through nearly every one of this season’s painful losses, the once garrulous Steinbrenner — "the Boss," as he’s known to friends and foes — has remained strangely silent. Steinbrenner’s silence is so out of step with what we know of the man that the baseball world is now buzzing with rumors that the Boss’s health — mental and physical — is failing. Sportswriters openly question who’s really pulling the strings in Yankeeland, and some baseball insiders and Yankees minority owners tell FORTUNE they believe 77-year-old Steinbrenner’s diminished presence foreshadows the team’s eventual sale. The questions about the future come at a crucial time — and not just because manager Joe Torre and general manager Brian Cashman have to figure out how to rescue the season. To top it all off, FORTUNE has learned that the Yankee’s cable channel, the YES Network, which airs Yankees and New Jersey Nets games, is up for sale. The fate of the Yankees is no provincial concern. For Major League Baseball, the Yankees are a moneymaking machine. FORTUNE investigates as the most renowned team in America approaches a very uncertain future. Special Package: KATRINA: THE AFTERMATH THE AFTERMATH, by Stephen Koepp, page 67 Not long after Hurricane Katrina struck two years ago, President Bush stood in the middle of Jackson Square in a nearly deserted New Orleans and made a bold promise. He vowed that "this great city will rise again." Now, nearly two years later, FORTUNE and several of its sister publications at Time Inc. sent journalists to the region for a firsthand exploration to find out what it will take to deliver on that prediction. Their stories and pictures can be found not only in the magazine and on the website, but also presented collectively at fortune.com/Katrina, along with multimedia reports from the scene. WHERE’S THE MONEY, by Adam Lashinsky, page 68 Ask New Orleanians how their city is faring these days, and their responses follow an eerily consistent arc. They begin with gratitude that you bothered asking and then move on to recitations of all the good that’s going on. Linger a bit on the subject, however, and optimism quickly turns to exasperation. Lack of government leadership, the glacial pace of rebuilding, and outright rage at absent neighbors who’ve yet to demolish blighted homes top the list of gripes. The frustrations are many, and all too often they boil down to money. By some measures, New Orleans in flush with cash. About $25 billion of Katrina-related private insurance claims have been paid out in Louisiana, some of which went to rebuilding damaged homes. What’s more, the federal government has allocated nearly $27 billion for housing, rebuilding the levees, and what’s known as hazard mitigation, the messy job of removing debris and repairing critical infrastructure, like broken sewer lines and potholed roads. Too few of those dollars, however, have found their way back into the local economy. FORTUNE digs deeper to find out exactly where the money is going. RISKY BUSINESS, by John Simons, page 77 Insurers see the Big Easy as a big loser, but Louisiana is hoping to change their minds. It’s not an easy sell. Of the $40.6 billion in losses associated with Hurricane Katrina, insurers paid $25.3 billion to Louisiana policyholders. And that doesn’t include up to $3 billion in losses associated with the energy industry. No wonder insurers are not racing to come back. The problem is not what many people think. More than 99% of Katrina-related claims in Louisiana have been resolved, and insurance is widely available. Unlike in other coastal states, insurers haven’t stopped doing business in Louisiana. They can’t. A 1992 law makes it difficult for a company to cancel a policy if a customer and an insurer have been doing business for three or more years. So while insurance providers are still doing business, they are responding to the perception of higher risks by offering fewer new policies and placing greater restrictions on existing coverage. All of this, of course, comes at higher prices. Convinced that fixing insurance will go a long way toward healing the state, Jim Donelon, the Louisiana state insurance commissioner, put together a package of proposals designed to attract and retain insurers. The message: You can make money here. We want you. FORTUNE investigates the proposals to bring business back to the Big Easy. THE NEXT ENERGY CRISIS, by Nicholas Varchaver, page 80 Port Fourchon feels like the edge of the world. As you drive south on Louisiana Highway 1 through Bayou Lafourche, open marshes seem to stretch endlessly until you reach this spot, 60 miles below New Orleans. Without port Fourchon and its fleet of vessels bringing food, supplies, equipment, and reinforcements to platforms in the gulf, the U.S. would lose access to nearly a fifth of all the oil and gas it uses. Port Fourchon is also home to pipelines, miles and miles of them. If the port seems like a mirage on the edge of a marsh, that may be because its permanence is anything but assured. The port sits in a region that, although it escaped most cataclysmic destruction of Katrina and Rita, is being ravaged by two slow-moving but equally ruinous phenomena: erosion and the sinking of the land. Some 25 square miles of Louisiana have been collapsing into the gulf each year for three-quarters of a century. A total of 1,900 square miles, roughly the area of Delaware, disappeared between the 1930s and 2005, and another 217 square miles were pulverized into liquid by Katrina and Rita. And that land loss, says Ted Falgout, who has run Port Fourchon for 28 years, poses a growing threat not only to the people who live here but also to the U.S. energy supply. "We’re on a train wreck here," says Falgout. FORTUNE uncovers what’s at stake for the U.S. DEPARTMENTS FIRST: Arctic Circle Oil Rush Melting icecaps are giving way to oil-rich waters — that the U.S. can’t claim. Little Widgets, Big Ad Dollars? Slide has a plan to make money by selling bling for your blog. COLUMNS: The Deal How the Bancrofts paved the way for Rupert to buy the Journal. Technology Google is starting to act like a garden-variety monopoly. INVESTING: This Bull Has Legs A hedge fund superstar explains why stocks are on track for solid gains — despite the recent selloff. BUSINESS LIFE: Kite Power There’s a new social network in Silicon Valley. If you want in, you have to ride the wind.
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CONTACT: Katy Reitz
Erin Clinton
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