Gustavo Fring (Giancarlo Esposito) has become one of the most popular characters in the Breaking Bad universe. Yet, much is still unknown about this chicken-slinging drug dealer despite further exploration into his character in the prequel series, Better Call Saul. At one point in season three of Breaking Bad, Gus tells Walter (Bryan Cranston) to never make the same mistake twice, largely in reference to Walt's trust in Jesse (Aaron Paul), a "junkie." This seems to have been a formative lesson in the way Gus carries himself and does business, yet audiences are left to speculate, like with much of Gus' past, what this formative experience was. There are two Gustavo Frings, the man he was before meeting Don Eladio (Steven Bauer) and the Juarez Cartel, and the man he was after, driven by calculated revenge.
When Gus and his partner, Max Arciniega (James Martinez), meet with Eladio, Gus appears more cheerful and full of life, a confident and radiant man. After Hector Salamanca (Mark Margolis) kills his partner, Gus' confidence becomes internal, displaying a cold and introverted demeanor. The light in Gus' is extinguished forever as he watches Max fall to the bottom of the pool. Not only had he lost his partner, but in all likelihood, the love of his life.
From the moment Gus met Eladio, he was doomed. The dominoes on the path to his downfall had begun to fall. The path of revenge would lead Gus to Walter White and his eventual demise. Gustavo Fring was on another path during his time in Chile, a path to the top, creating a reputation that would spare his life at the hands of the Cartel.
Generalissimo
In the eighth episode of the fourth season of Breaking Bad, "Hermanos," Gus is questioned by Hank Schrader (Dean Norris) in connection to his fingerprints being found at Gale Boetticher's (David Costabile) apartment. Hank tells Gus that he's surprised he couldn't find any records of Gus living in Chile, although he discovered he immigrated to Mexico in 1986 and later was given an entry visa to the U.S. It's important for Gus that nobody knows who he was in Chile, as he asks Mike (Jonathan Banks) to see if he can find any trace of him, with Mike stating that if he can't find him, then nobody can.
Hector Salamanca refers to Gus as "Generalissimo" when they meet for the first time, a title meaning commander of a combined military force. Gus had worked for the military dictatorship of Augusto Pinochet, one that came into power in 1973 after staging a coup against a democratically elected leader, Salvador Allende. If Gus is the same age as Giancarlo Esposito, that would make him fifteen years old at the time of the coup. It's unlikely that Gus would have been a soldier during this time, as that would have made him a career military man, and his character simply doesn't read like that. Gus was likely receiving a degree at this time in the business field, possibly at a top-tier institute.
Gus is, in all likelihood, a man from military intelligence rather than a general in the field, with Hector's comment likely being an exaggeration of his position in the Pinochet regime. If Gus were a part of the CNI (National Information Center), he would have been a party to numerous assassination attempts, kidnappings, and torture. With the Pinochet regime being a far-right anti-Communist regime, the CIA heavily supported it in the hopes of curbing the rise of Communism in Latin America. Many in the Chilean intelligence agencies had ties to the CIA, so if that's the case, there's a good chance Gus worked for Pinochet and the CIA.
The way Gus' operation works in Breaking Bad and Better Call Saul is a bit like an intelligence agency with the way he frames crimes, kills people/has them disappear, tails, and records people in secret. If Gus were a "General," it is likely he would have had a more militaristic approach like the Salamancas. The CIA ties would explain why the Juarez Cartel didn't kill Gus.
The Juarez Cartel
Although it is never directly stated, Gus works for the Juarez Cartel in Breaking Bad and Better Call Saul. When Hank is in El Paso, he finds himself in conflict with the Juarez Cartel, using an informant named Tortuga (Danny Trejo) to infiltrate them. Juan Bolsa (Javier Grajeda) and the Salamanca Twins (Daniel and Luis Mocada) discover Tortuga's deception and have him decapitated. This action all but confirms that "The Cartel" in the show is the Juarez cartel since Bolsa was one of the founders. When Gus immigrated to Mexico from Chile in 1986, it was likely with the help of the CIA, as later, he was given a visa to the U.S., seemingly with ease.
Some may argue that Gus was an agent working to infiltrate the Mexican cartels on behalf of the CIA, but that would make it difficult to explain why Gus isn't still doing this in Better Call Saul. If the CIA knew Los Pollos Hermanos was a front for drugs and Gus had stopped helping them, why would they allow it to still exist? In terms of government/crime collaboration, this would be a bigger blunder than the FBI's connection with Whitey Bulger. It's more likely that Gus was given entry to Mexico and a visa to the US as a reward for his service to the CIA. Their collaboration is likely in the past, with the CIA's knowledge of Gus' drug dealing being minimal or non-existent.
Gus and Max tricked Juarez into a meeting by concealing meth underneath the lid of one of their Los Pollos Hermanos chicken buckets. Gus's partner Max is an educated Chemist, while Gus is referred to as "the businessman." It is suspected these two met at the university together, creating their partnership. Eladio pretends to humor their proposal but then has Hector kill Max by shooting him in the back of the head. As Gus collapses to the floor, Eladio tells Gus that the only reason he's alive is because of who he was in Chile.
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In 1985, Kiki Camarena, a DEA agent, had been kidnaped, tortured, and killed in Mexico, a year before Gus came over. This kidnapping set the standard that American government officials were off-limits to the cartel. Eladio likely didn't kill Gus, not because he was a Chilean intelligence official, but because he was a Chilean intelligence officer with CIA ties, whereas Max was just a civilian. So what was the mistake that Gus made twice? It might have been trusting the wrong people.
In Better Call Saul, Gus tells Peter Schuler (Norbert Weisser) that with their backs against the wall in Chile, it was Peter who saved them. Gus might have gotten into meth dealing in Chile and connected with the wrong people, risking his being caught by fellow intelligence officers for a severely punished crime under the Pinochet regime, getting away by the skin of his teeth. The wrong people could also refer to the CIA ruining Gus' life and forcing him to flee his home. When Gus came to Mexico, trusting the wrong people got his lover and partner, Max, killed. It's safe to say whatever mistake he made in Chile was likely repeated in Mexico.
Man in the North
In Better Call Saul, Gus is at his peak in the states, using Los Pollos Hermanos as a front for meth distribution while building the lab his prodigy, Gale, would end up running. The way that Gus sees Gale mirrors what Gus' original values were before revenge corrupted him. When being interrogated by Hank, Gus tells him that Gale was a kind and gentle person he thought a lot of. Gale is much like Gus' lover, Max, a kind and gentle Chemist eager to make meth on the side. While Gus may not be in love with Gale, he adores him for the qualities he maintains. It only makes sense that when Max dies, Gus' loses his kind and gentle side, becoming the cold and imposing man audiences have come to know. In a way, Gus can be seen as envying Gale because he's yet to be robbed of this kind side, so when Walt and Jesse have him killed, it's like having Max shot all over again.
Gus is so particular as to whom he goes into business with, and if the lesson he learned during his time pre-Breaking Bad and Better Call Saul was to be careful getting into bed with the wrong people, then Walt's betrayal is yet another example of why trust is not something to be thrown around lightly. When someone loses Gus' trust and respect, it can never be gained again because each time that wound is inflicted, it's as if Gus goes back to that pool with Eladio, Bolsa, and Hector and witnesses the love of his life die all over again.