With his death, Cuban-American leader Jorge Mas Canosa leaves behind a $700 million construction empire and a big question for the future: Can his son hold the conglomerate together?

The publicly traded company that Mas Canosa built -- MasTec Inc. -- is now in the hands of his 34-year-old son Jorge Mas Jr., who joined the family business in 1984. The company combines engineering and construction, digging ditches and laying of copper and fiber-optic cables for telephone companies across the United States, Spain and Latin America.

Most local financial analysts trace the company's meteoric rise from a local construction operation to a global corporation in less than four years to the political skills of the father.

Growth has been substantial. The family-owned business grossed $40 million in sales in 1994, a figure that grew to $700 million this year. Profits more than tripled from $8 million in 1992 to $30 million in 1996.

Does Mas Jr., who is in charge of the day-to-day operations, have the same abilities to guide MasTec as it absorbs a series of acquisitions in Brazil, Argentina, Spain and most of the southern United States?

Wall Street analysts say yes.

``The dad is involved, but I think the son is more critical to the business right now,'' said David Kerdell, who follows MasTec for the New York investment bank Oppenheimer & Co.

Stock reacted to news

Nonetheless, some investors shuddered at the possibility that Mas Canosa would be gone. On Sept. 29, the day it was reported that the 58-year-old MasTec chairman was hospitalized in Miami, the volatile shares tumbled almost $4 a share to $44.

Closer to home, financial observers are more inclined to believe the father played a critical role in working lucrative deals. Mas Canosa's original company, Church & Tower, traces its roots to public works projects in Miami-Dade County.

It was Mas Canosa's personal charm and astute use of political connections -- particularly in the Spanish-speaking world -- that guided the company and helped clinch contracts in South Florida and mergers and acquisitions here and abroad.

Some of that work now is under scrutiny. Since October, The Herald has documented more than $1.5 million in overpayments and overcharges related to Church & Tower's work for the county. The company has blamed the overcharges on its subcontractors or on county inspectors who supervised the work.

On Friday, Miami-Dade Mayor Alex Penelas called for the resignation of a top county administrator who ultimately oversaw Church & Tower's work. Penelas also called for the possible suspension of Church & Tower from doing county jobs until prosecutors determine how the overcharges occurred.

With the death of Mas Canosa, some people wonder if the company will be as adept at landing big contracts.

Father was deal-maker

``There could be some serious problems in the company especially when it comes to deal-making,'' said Gunther Karger, president of the Discovery Group, an investment research firm in Miami.

``The Spanish deal was clearly done with the senior man through his connections,'' Karger said, referring to the 1996 acquisition of Sistemas e Instalaciones de Telecomunicaciones, the construction subsidiary of Telefónica de España.

Mas Canosa's involvement was underscored by his presence at the final signing ceremony in Madrid, where he gave interviews to the Spanish press.

Mas Canosa launched his business in 1968 with a manhole contract from Southern Bell -- as BellSouth was called then -- and a $50,000 loan from Republic National Bank. The first big break came in 1971, when his company, Church & Tower, secured the master contract with Southern Bell. Church & Tower expanded into street construction and built two-thirds of downtown Miami's Metromover in partnership with the Brazilian construction firm Odebrecht.

Mas Jr. came on board after he graduated from the University of Miami -- at a time when Mas Canosa was devoting considerable time to political causes.

Merger was a key step

The giant step for the company and the Mas family came in 1994, when Mas Canosa negotiated the purchase of a money-losing competitor, Burnup & Sims Inc., located in Palm Beach. Mas Canosa and Nick Caporella, who was chairman of Burnup & Sims, shared an embrace at the March 11, 1994, special shareholders meeting that completed the merger. But Mas Jr. gave the speech announcing the new company's goals, new name and new location in Miami.

The merger allowed the Mas family company to go public, and Mas Jr. moved from the position of heading the family's machinery rental and real estate firms to chief executive at MasTec. The merger also set off a wave of expansion for the company.

At the most recent annual shareholders meeting in May, Mas Canosa presided over the vote to approve several routine questions on the proxy statement, then turned the meeting over to his son to describe the company's expansion plans.

The merger also transformed Mas Canosa from rich to extremely rich as the share prices climbed from $7 at the beginning of 1996 to a high of $55 a share. Mas' family owns about 56 percent of the company.

Mas Canosa's and Mas Jr.'s holdings in MasTec total nearly $400 million, down more than $350 million since Mas Canosa's illness was first disclosed. The shares closed Friday at $25.37.

Copyright © 1997 The Miami Herald