CHAPTER VI -Free e-book.
… of “A life full of changes”, a free e-book written by Eugenio Magdalena.
THE DEVALUATION OF THE BOLIVAR
The devaluation of the bolivar to Bs. 7,50 per USA dollar (The bolivar had been stable at Bs. 4,30 per USA dollar, since 1961) and the creation of the corruption’s nest RECADI by the Government of President Luis Herrera, created tremendous difficulties for Metrodata SA, for everything we sold was imported and RECADI didn’t approve the concession of dollars to us at the preferential rate of Bs. 6,30 per USA dollar, forcing us to resort to the black market, where the dollar rapidly skyrocketed, until during the second semester of 1985, reached Bs. 14,25 per USA dollar {(Today, more than Bs.1.9 trillion(!) per USA dollar, as Chavez took three zeros from the exchange rate and invented the so called bolivar fuerte (Strong)(?), then Maduro eliminated three zeros more from the dollar exchange rate, another “achievement” of the Venezuelan “Robolution” (Rob- olution))}, making unviable the imported equipments we sold, and forcing the owners of Metrodata S.A.to sell the company (Metrodata also had profitable, monthly payment, servicing contracts for the Microdata minicomputers, which also could be sold and for which there was a market).
Thus, the rest of the year, my boss was looking for buyers and well within 1985, the company was sold, and I became unemployed.
As an Economist, my future perspectives for the Venezuelan Economy weren’t any good.
So, I recovered my Spanish nationality (In my 18th birthday I’d acquired the Venezuelan nationality) and leaving temporarily my wife and son in Venezuela, I went in December 1985 to Madrid, Spain.
Due to my negative estimations about Venezuela’s economy, I didn’t even look for another job, nor did I consider the employment offer which Metrodata’s new owners — from England — made to me.
SPAIN AGAIN
I was firmly decided to leave Venezuela. On the other hand, the perspectives for Spain were very good, as that country was about to join Europe’s Common Market (Spain joined the European Community in January 1986), and a heavy downfall of investments on Spain was expected (As eventually it happened), specially from Germany.
I had formal education as an Economist, spoke and wrote good English, and had an MBA, which I’d obtained in England, so I considered Spain a good bet and surely a place where I could find a good job.
And it was an excellent bet, as I arrived to Madrid in December 1985, and in February 1986 I started working for CIGNA, a multinational USA’s Insurance company, in which I’ve developed an almost 16 years career, which encompassed five different countries.
Adapting to Spain’s society though, wasn’t easy for me. In Spain, I was a “sudaca”, a condescending, pejorative term used by the Spaniards to refer to the Latins. It is true that people became a bit disconcerted when I showed my DNI (Spanish identity document), that proved that I’d been born in Spain, which helped me a lot, but the paradox was that, for most purposes, I was a foreigner in Spain and also in Venezuela, for in spite of my 100 % Venezuelan idiosyncrasy and customs, there was always someone there who reminded me that I’d not been born in Venezuela (As if one was able to choose nationality at the time of birth!).
In barely six months after my arrival, I revolutionized the branch at Valencia, a coastal city on the East of Spain, where I was sent after an intensive training of 1 month in the H.O. of my enployer in Madrid.
For starters, I moved the office — very old — of a location very close to the Central Market, to a space in a modern building in Valencia’s financial center.
We transferred (For a price) the lease contract of the previous office space (Too big, old and almost empty, because the branch had only one administrative employee) to a local Accounting firm and moved to a smaller office. With the transfer’s money, we bought new and modern furniture for the new office, this much smaller, simply adapted to our needs but better placed and more modern.
My grandfather, Eugenio, when he was 18 years old and was getting married to my grandmother, Amparo, in professional photo taken the day of their wedding. Sama de Langreo, Asturias, Spain,1924.
Me, as an 18 year old, in the Estadio Nacional, known today as “Brigido Iriarte” stadium, El Paraiso, Caracas, Venezuela, 1967.
Later, I educated and nominated new agents and expanded our operations to the neighboring province of Castellon.
Nowadays it may seem curious and old, but in those days it wasn’t possible — like today — to send documents instantly from one location to another (We used urgent postage mail whenever we needed to send something, say to USA’s H.O., which always took a long time to arrive at destination ).
If we wanted to send a Memo to Madrid’s H.O. for instance, copying several people, we used the telex machine. In the office we had a telex machine for that purpose. The message had to be written in the machine’s keyboard, similar to a typewriter, and the machine issued a tape.
Passing the tape through a device in the machine, allowed you to send the message to a single addressee. For more than one recipient of the same text, you needed to pass the tape through the device as many times as needed, writing each time a new recipient.
The advent of the Facsimile machine or Fax, as people call it, seemed like a miracle to me.
Identical copies of an original document could be sent everywhere to a user’s number, simply by passing the original document, through the Fax machine.
It seemed like magic to me!
Nowadays a document, a graphic, or a photography can be sent, with almost no effort, to anyone’s e-mail address, saved into a device — even portable — and send the file directly to the recipient’s email.
However, today we got so used to it, that it doesn’t marvel us anymore.
Very soon, premiums of the Valencia’s branch, grew up to three times the previous year’s premiums.
What had been done in Valencia didn’t go unnoticed to the new Country Manager of the company, Mr. Johnson, who had replaced the previous Country Manager, Basilio Pugatchenko, already deceased, who had hired me just a few months before (Basilio was later transferred to Paris, France) and who would become, eventually, a close friend.
Mr. Johnson had asked me to submit a plan to him, to expand the commercial activities of the company, which I did. Having gone through the plan, Mr. Johnson named me CIGNA Spain’s National Commercial Director, arranged my transfer to Madrid and asked me to execute the plan that I’d submitted.
I remained in Spain well into 1989, dedicated entirely to the job, working often from 8 AM to 8 PM, participating in all of the company’s Committees: Collections, Underwriting, Strategy, Commercial, etc., all aiming to learn more and little by little, I ended up being “the strong man” of the company.
Even some of the company’s Spanish old-timers, who perceiving me as a threat to their sometimes-privileged positions, at the beginning had attacked me, now very much respected me and were fearful of me.
I also smoked a lot; I was a compulsive smoker of those who keep a carton of cigarettes at home and another one at the office, in which all the Managers also smoked.
I recall that when we had a Management Committee (Usually once a month), with 7–8 smokers around the conference table, it was impossible not to smoke.
At that time, there weren’t many talks yet about second- hand smoking or even about the damages to human health caused by smoking.
I remember that in one occasion I was at the office more or less at 1 P.M. (In Spain almost everybody left for lunch at 3 P.M); I was solipsistic writing something in the typewriter (I’d a secretary, Fina, but sometimes I liked to type myself), I’d drank black coffee all morning; I’d a cigarette lighted on an ashtray, but without realizing it, I lighted another one; to increase my caffeine’s dose (I’d a lot of work that afternoon) I was taking sips of a Coca-Cola can, when all of a sudden, my heart began to beat very rapidly, without stopping, victim of an atrocious tachycardia.
Scared, that same afternoon I visited a cardiologist, who upon revision of my electrocardiogram, normal by then, started to ask me questions about my lifestyle. I told him that I was married, I’d a child, worked a lot, smoked two packs a day, drank a lot of black coffee daily, and Coca- Cola occasionally in the office.
I told him that at that time, I wasn’t practicing any sport, but I’d been an enthusiastic sportsman until the age of 35 (By then I had 38 years of age).
The doctor then spoke to me bluntly, saying that my problem was very simple: if I didn’t change my lifestyle, I’d die young.
Just upon leaving the clinic, I threw into a trash recipient a valuable gold lighter (So it’d hurt even more, if I restarted smoking again) and what remained of the pack of cigarettes I was currently smoking and began to pest Mr. Johnson until he prohibited smoking at the company’s meetings.
I ‘ve not smoke cigarettes since that day, although I’ve always enjoyed an occasional good cigar.
As Mr. Johnson delegated on me many of his duties, I took part in a Swiss bowling tournament organized by some European reinsurers belonging to the International Reinsurers Club, a tournament in which I resulted champion. I still keep the beautiful silver trophy that they gave me as the tournament’s champion.
The following year, I took part in that tournament again, finishing in 5th place and receiving a beautiful, albeit smaller trophy than the previous’ year one, a silver trophy that I also keep.
I also remember that on a visit by CIGNA’s Worldwide President, the Country Manager Mr. Johnson, stepped out of the room for a while, and his absence was taken advantage of by a H.O.’s middle executive to criticize and attack a local procedure which, in my opinion, was perfectly O.K.
Surely, the man wanted to show-off in front of the worldwide President. Even though I was alone, I kept calm and didn’t show any fear, responding to the attack with composure and logical arguments, for I mastered most aspects of the operation, leaving surely a very good impression among the attendees.
In another opportunity, we hired a prestigious English consultant (The Mac Group), to prepare a presentation in support of an investment we wanted to make, to associate ourselves with a large Spanish bank (Santander bank), which almost simultaneously, although we didn’t know that at the time, signed an agreement with Met Life and formed Genesis, a new jointly owned insurance company, in order to sell throug it personal insurance policies (Accident, Rents, Life, etc.) to the bank’s client base.
I was then named the official intermediary between the company and the consulting firm and I went to our H.O. in Philadelphia, USA, along with the consultant’s partner assigned to our project to “defend” it.
I made the project’s presentation in English and responded the questions of the audience, gaining a lot of visibility within the company and, in spite of the failure of the project to materialize (it was too late).
At the end of 1989 there was a vacancy in Colombia, and I was named Country Manager and President of CIGNA Insurance Company of Colombia S.A.
COLOMBIA
We arrived at Bogota the day of the official appointment of the new Colombian President elect, President Gaviria.
I recall having put our heads (I registered at the hotel there with my wife Isabel, who had accompanied me on that trip) out of the window, and we saw a few workers lying on a grass island separating a two way road in front of the hotel, probably in the middle of their lunch break.
Farther, there were some soldiers exercising in what seemed to be military headquarters.
Three cows, very fat, white & black, were passing by the road in front of the hotel slowly and freely.
The whole picture seemed to us rustic and bucolic, used as we were to the ruckus of Madrid.
Looking for a place to live in Bogota, we came across a modern, well furnished apartment in the North of the city, overlooking Bogota’s Country Club. The owner, a beautiful lady named Elisa, who had been Miss Manizales, had recently divorced, had got the apartment property in the patrimonial division, and didn’t need it anymore.
As the apartment fitted our needs very well, we rented it and eventually, the owner, Elisa, became Isabel’s best friend in Colombia.
At those times, the sadly famous drug dealer Pablo Escobar, was ordering bombs being planted and detonated all over Bogota, to the point that we — fearful of the luck of our son, Eugenio, that was already a teenager and demanded to stay out at night — decided to send him first to a very expensive boarding school in the USA: the Mercersburg Academy, in Amish county, near Philadelphia.
A year later (As he felt very unhappy there), we changed him of schools and sent him to Madrid, Spain, to the also expensive boarding school of British studies, King’s College of Madrid, where we tough he would also be safer.
The insurance company had its H.O in Bogota, a city that was also my base and had full branches in Medellin, Cali, and Pereira, besides Sales offices in Cartagena and Armenia.
Photograph taken of a picture of me: In the office in Bogota, Colombia, 1992
In all some 100 employees and about $ 80 million of USA dollars in annual premiums, which made the Colombian branch one of the larger (If not the largest) CIGNA’s operations in Latin America.
With my continuous visits to the offices outside Bogota, I ended up knowing most of Colombia fairly well.
When I was in Bogota, I frequented the Country Club, the membership of which, as an expatriate, the company paid, besides the apartment, a car and a driver, my son’s education up to a limit, a portion of my salary in USA dollars in an account in USA, the rest of my salary in Colombian pesos and annual return airplane tickets for my family and me to Spain, and even though I still didn’t play golf (I began playing years later), I used the golf courses for jogging, which I took up seriously in Colombia.
After running I went to the Club’s gym for ½ hour and then I had a steam bath, or a sauna followed by a sporting massage of 1 hour (for a ridiculously low price).
Obviously, I was in very good form, back then.
My boss Jim (RIP) that at the beginning didn’t sympathize too much with me, (he had allowed me to join his group of subordinates, just by a recommendation of his second in command, Basilio Pugatchenko (RIP)), (Both of them were based in Philadelphia), a while later was a fan of my work and treated me fairly well.
More or less at the beginning of 1991, I restructured the company and that resulted in the Annual Expenses reduced (And an increase in the Annual Profit) of approximately $ 1.5 million USA dollars.
As it was the case, there were many agents with an open production code, which hadn’t produced anything for years.
Poring through a series of reports I received, I noticed that most of those agents had a negligible portfolio of business placed with us, hardy noticeable by our numbers if we decided to cancel all their policies.
Nevertheless, those agents requested quotations from us very often, which generated effort and expenses by the different departments involved, so I ordered their production codes to be closed and their portfolio of policies not renewed or cancelled.
With that done, I asked the Department’s heads to give me an estimation, measured in headcount, of the corresponding reduction of work in their respective areas. I also asked everybody, including the Branch’s Managers, for a reduction of 15% on their general expenses, so I was able to reduce headcount by 20 people and expenses by a total of $ 1.5 million USA dollars.
The work done, earned me since the goodwill of my boss Jim McCarty (RIP), who changed radically his attitude towards me and also gave me a good reputation within the company.
MIAMI
During the second quarter of 1993, something happened in the company, as Jim McCarty, who by then was still my direct boss, left CIGNA and went to Liberty Mutual and Basilio Pugatchenko, who was his second in command and responsible at Regional L.A. level for A&H (Accident and Health) or the successful SPD (Special Product Division), under Bendt Thempstrup, was promoted and was now in charge of all lines (Fire, Technical Lines, Auto, Casualty and Marine, besides A&H) for the Latin American Region.
Basilio asked me to replace him, as A&H Regional Manager reporting to him and to Bendt, in a new office in Miami that Basilio was opening.
Although I knew that I would lose all expatriate benefits (The expat system was designed by and for Americans, so I was not considered a foreigner working in the USA), I didn’t pass on the opportunity and accepted the new position, as living and working out of Miami attracted me a lot and, of course, reporting to Basilio and Bendt, was of my liking as well.
However, the first year in Miami was hard for me and also for my wife Isabel.
In Colombia, I was very respectable as President of an USA multinational.
In Miami though, I was a no one, incapable of even opening a bank account.
In effect, not having a credit history, it was simply as I didn’t exist.
It was useless trying to explain that I couldn’t have a credit score, as I’d never before lived in the USA.
To no effect, I tried to obtain credit in department stores, through gasoline cards, used and new car dealers and… nothing!
I couldn’t get credit anywhere!
At the end, I had to resort to my bank in Colombia, Banco de Credito, as they knew me and its bank in Miami, the Helm Bank, opened a current account on my name, gave me a VISA credit card and granted me credit to buy a new car (eventually, years later, grateful for their help then, I also financed the purchase of a house, in 2002, with them).
Once we had a credit score a year later, we were flooded with credit offers of all kinds but at the beginning we could not even get a gasoline card!
My wife Isabel also suffered, used as she was, at having domestic personnel for all the home’s chores at our home in Colombia
In Miami though, she had to do it all by herself: cooking, washing the clothes, ironing, cleaning the house, etc.
It had been a promotion… but, of tittle only!
And… of more work!
Nevertheless, it was going well for me at the job. Between resignations and some firings, I had a good team at the countries (I was responsible for Puerto Rico, Venezuela, Panama, Colombia, Ecuador, Chile, Argentina, Brazil and for a unit we had in Miami — call center included — that we called LASU, dedicated almost entirely to attend Amex card-holders, as we sold people’s insurance through the credit card).
In 1994 we were selected amongst the three more successful Managers worldwide of CIGNA International and received from the hands of the company’s President, Ed Hanway, the President’s award and a photograph (That I still keep), thanks to have produced in the Region, a Profit of some $ 12 million USA dollars.
In my multiple trips visiting the country operations I was responsible for, I travelled frequently to Brazil, a country that was opening its economy to the world under the Presidency of Fernando Henrique Cardoso and in my line, A&H, seemed to offer unsuspected possibilities.
One of our clients, Nipomed, a sales organization, for instance, was able to sell $ 1 million USA dollars…a month!! of the profitable product Cash Hospital Income Plan (CHIP), which increasingly called for my presence in Brazil.
In fact, the production numbers for Brazil dwarfed the regional LATAM’s numbers.
So much so that, in 1995, the company decided to send me to Brazil, as Country Manager and President of CIGNA Insurance Company of Brazil S. A.
