Puerto Rico's Brother Act

This is the palmy time of year in Puerto Rico, when fugitives from the mainland crowd the island's modernistic concrete hotels, hoping to warm their bones and tan their hides. Virtually every dollar the tourists spend somehow turns a profit for three forceful brothers named Ferre (rhymes with beret).

Since World War II the Ferres--Jose, Luis and Herman--have built a complex of seven companies into Puerto Rico's biggest private business. Today the Ferres make 90% of the island's cement, nearly all its bottles and most of its tile and paperboard. They also fabricate steel, make sugar-milling equipment, and are partners with Pan Am in the jazzy new El Ponce Intercontinental hotel. In 1962 the Ferre enterprises grossed $80 million and netted, after taxes, some $4,000,000.

Father Had Plans. The Ferre empire grew out of a small ironworks started in 1918 by the Ferre brothers' farseeing father, Don Antonio Ferre. A third-generation engineer himself, Don Antonio carefully fitted each of his sons into a family pool of management skills. Fun-loving Jose, now 60, was sent to study business administration at Boston University, today functions as the family's salesman and visionary deal maker. Reflective Luis, 58, who studied mechanical engineering at M.I.T., is the organizer, labor relations chief and, as the leader of Puerto Rico's Republican Party, the family politician. The production expert is Herman, 53. a quiet sort who majored in civil engineering at M.I.T. (A fourth brother, Carlos, who died in 1958, was a chemical engineer.)

In 1941, with the aid of a U.S. Government loan, the brothers began to build a cement plant to supply Puerto Rico's wartime needs. German U-boats sank all five ships sent from the U.S. with machinery for the plant, but the Ferres determinedly scrounged up old motors around the island and cut out the big gears they needed in their own ironworks. In the end, the plant turned out the cement used to build Puerto Rico's big Roosevelt Roads naval base.

In 1950, when Puerto Rico's Governor Luis Munoz Marin decided to sell off four manufacturing plants started by the local government in a fit of socialist experimentation, the Ferres again turned adversity to advantage. Unlike other bidders, who were interested only in the government's moneymaking cement plant, the Ferres agreed to buy unprofitable clay, glass and paper plants as well. By bringing in outside experts and training local workers in modern techniques, the Ferres had all the plants in the black within a year. Today, wages in the Ferre plants run from $1.60 to $2.04 an hour, almost double the average for Puerto Rican industry.

A Star in Their Eyes. Though they have ridden high on Puerto Rico's boom, the Ferres' interests are not confined to the island--or just to business. In 1954 they bought one of their former customers, Florida's Maule Industries, whose cement products have gone into most of the Miami Beach hotels. In their home town of Ponce, the brothers have put up $1,000,000 for a new university. And Luis Ferre, a passionate art collector, recently engaged Architect Edward D. Stone to design a new home for Puerto Rico's solitary --and Ferre-financed--art museum.

The Ferree brothers' fondest hope is that their sons--there are four of them--will some day run the family businesses not from the Commonwealth of Puerto Rico but from the 51st state of the U.S. Statehood for Puerto Rico would more than double the corporate tax bill that the Ferres pay under the Commonwealth, but they argue that it would attract many new industries and set off a new Puerto Rican boom by removing any danger that the island may some day be caught up in Caribbean turmoil. Says Luis Ferre: "If you can sell twice as much because of expanded markets, taxes are not an important consideration."

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