Banana (22 page)

I
N THE MID
1980s, while Rony Swennen was beginning to grow bananas in Nigeria—laying the groundwork for today's multinational effort to improve the fruit not for commercial purposes but to feed the hungry—United Brands had entered a steep decline. The once-powerful banana company was still selling lots of fruit, but it continued to be unable to manage itself. CEOs came and went. In 1984, a year after the company announced a $200 million loss,
Fortune
magazine offered a bleak assessment: “For more than a decade, United Brands has looked as appealing to investors as a black banana.”

There was a certain irony to Chiquita's solution. For most of its history, the company had argued that developing nations
needed
dictatorial regimes. It was the only way the engines of progress could continue to run smoothly. Now, it was the fruit company itself that searched, once again, for a strongman.

It found one in Carl Lindner.

The Ohio native fit with the United Fruit tradition. He was a self-made billionaire whose first business experience was running his family's ice cream parlor and dairy store after the 1952 death of his father. Lindner then expanded the homespun enterprise into a chain of convenience stores—United Dairy Farms still operates throughout the Midwest—and reinvested his profits until his American Financial Group owned several of the country's largest insurance and banking companies (including the Great American Insurance Company and the Provident Financial Group) along with real estate throughout the United States (which today includes the air rights to develop open space above New York's Grand Central Station. Anything built there would stand adjacent to the MetLife tower, the building Eli Black leapt from).

Lindner began purchasing United Brands stock in 1973 and, like Zemurray, watched as his holdings declined in value.

But Lindner didn't see Chiquita's decline as terrible news. As a self-described “bottom feeder,” he loved finding companies that were—through mismanagement, bad luck, and competitive pressure—worth far less than he believed they could be. In 1984 Lindner took control of the company.

The ice cream and insurance mogul made the usual changes. He sold subsidiaries that were deemed unimportant to the company's banana business. He cut costs, moving the corporate headquarters from New York (Black had relocated the business from Boston) to his home base of Cincinnati, where it remains today, and further reinforced the company's branding efforts by officially changing the name from United Brands to Chiquita in 1992.

What the Lindner era most brought back was aggression. It wasn't the all-encompassing muscle the company wielded through most of the twentieth century, but there were times when it resembled it: In 1994, near Tela, Honduras, Chiquita closed Tacamiche, a company town for sixty years. The company said it was abandoning the village because of poor soil conditions; opponents argued that the move was part of the company's strategy of reducing plantation ownership in Latin America in order to work with contractors, who wouldn't be subject to the kind of labor oversight a multinational corporation might draw. When the residents refused to move, bulldozers—escorted by bayonet-wielding Honduran military police—arrived and razed the entire town. Six hundred people—138 families—were made homeless.

Lindner's outward personality was more like Black's than Zemurray's. He didn't swear, drink, or smoke. One account described him as “mild-mannered and shy.” Lindner's trademark was to offer gold-flecked cards, embossed with slogans, to folks he was meeting for the first time. One says: “Only in America. Gee, am I lucky.” Another reads: “I like to do my giving while I'm living, so I know where it's going.”

But the Lindner era, despite his single-minded leadership, continued the Chiquita seesaw. It was as if the company were caught between two worlds: the old one, where it wielded absolute power, and a new one, in which corporations needed to conduct activities more strategically and even try to do some good. That back-and-forth was demonstrated in 1998. The company agreed to a Guatemala City meeting with representatives of each Central American banana workers' union—something that would have been unthinkable a few decades earlier. The union advocates presented the banana giant with a proposal for a region-wide initiative that would improve labor conditions and raise environmental standards.

The company patted itself on the back for coming to the bargaining table—but refused to make a single concession. Three years later, the company veered back into contrition. It negotiated an agreement with the Central American unions and created its partnership with the Rainforest Alliance, which agreed to certify environmental practices at the farms Chiquita owned. This was progress, given the prior three decades of plantation divestment. (Today, Chiquita has instituted uniform standards throughout the supply chain; it is the only banana company to do so. Critics say those standards aren't consistently enforced.)

But the biggest battle the company once known as United Fruit had to fight as it moved toward the new millennium had nothing to do with workers on strike, the destruction of rain forest, or even the American breakfast table. It is a conflict that continues today. On the surface, it seems like a pure business matter. But like the industry's earliest expansion, it portends dire consequences for the world's banana crop.

IT BEGAN IN 1993
.
Europe had unified and in doing so had become an even bigger market for bananas than the United States. (Not by much: Continental consumption averages about 30 million tons of the fruit annually versus 26 million tons in the United States.) Among the lesser-known elements of Europe's consolidation were programs designed to aid former colonies. That included the Caribbean banana plantations Chiquita had mostly abandoned as Panama disease moved from island to island. Now, those small farms, growing Cavendish but no longer owned by Chiquita, were given preferential treatment by European governments—the measures were designed to ensure the economic health of those now-independent countries. The result? Chiquita, which had held 20 percent of the European market, suddenly found itself with less than half that. The company had to do something with all those excess bananas, so it sold them in the United States, creating a banana glut that caused prices to plummet.

Chiquita's lawyers and lobbyists argued that the European regulations were both unfair and illegal under World Trade Organization rules, a case of government policy mandating preferential treatment to specific companies in what was supposed to be an open market. Lindner went directly to U.S. officials—at that time, the Clinton administration—and in 1996 the United States lodged an official protest with the agency. The day after Lindner's meeting with administration officials, the banana mogul donated $500,000 to the Democratic Party.

One of the things that seemed to be forgotten in the fight was
why
the European tariffs were enacted in the first place: to help the banana-growing islands keep jobs and emerge from poverty. In an interview, one Dominican farmer imagined the consequences of an outcome favorable to Chiquita, which would return the banana industry to the grown-where-they're-cheapest status quo: “If they squeeze us out, we will be the ones that will suffer. When you take away a man's daily bread, you take away my livelihood. You send me to common crime. You force me to [traffic in] drugs.”

At the height of the battle, Chiquita scored a minor victory at home, with a tactic that was familiarly heavy-handed. In 1998 an article nearly twenty pages long appeared in the
Cincinnati Enquirer
. It painted the company not as one that was merely in turmoil or pursuing policies that resembled those it had embraced in the past. Instead, the story alleged, the system that led to the banana republics still existed: Chiquita ships were being used (without company knowledge) to import cocaine; environmental damage and labor exploitation were as bad as ever; and there was just as much behind-the-scenes interference with government, at home and abroad, as there was in the past.

The story—which can still be found on the Internet—was a direct attack on everything the company had ever been, and, in the estimation of the writers, everything it still was. It was the boldest assault on the United Fruit legacy ever mounted.

It did not turn out well for the press. One of the reporters was found to have gained illegal access to the banana company's voice-mail system. The reporter was fired and criminal charges were brought against him. Another reporter resigned. The paper's top editor was transferred. In a front-page correction, the
Enquirer
disavowed the stories, declaring them “false and misleading,” and paid the banana company a settlement that the
Columbia Journalism Review
estimated at $14 million. Later, it was revealed that the agreement included restrictions that amounted to the newspaper promising to
never
write about Lindner or any of his businesses again.
Editor & Publisher
, the print-journalism industry trade journal, said that the
Enquirer
“turned over editorial control of its newsroom to Chiquita.” Other media, in analyzing the story, found the apology odd. The
New York Times
noted that nobody “disputed the authenticity of the…Chiquita records that formed the basis of the most sensational allegations.”

But the fight against negative press, as pitched as it was, amounted to little more than a sideline compared to the battle against Europe. At the company's urging, a tit-for-tat trade war began. Europe raised duties on American steel. The United States imposed charges on European cheeses, wines, and luxury goods. Once again, the interests of a banana company had an effect that reverberated far beyond the fruit aisles.

Did it work?

In 1997 Dole once again surpassed Chiquita in market share. Chiquita would never again solely dominate the world's banana sales. It would, and continues to, swap the title with its longtime rival.

Americans still loved bananas. We showed no sign of making apples our favorite snack (though Pringles were another story). Banana growers continued to face the pressures they always had. There were hurricanes, labor unrest, and taxes—the same things that prompted Sam Zemurray to wrest control of Honduras, the same things that turned United Fruit into a symbol of overreaching, blindness, and cruelty.

In 2002, after more than a century in business, after four different names and billions of bananas sold, Chiquita declared bankruptcy. It would never be an ordinary company. It would never stop being
the
banana company. But it would be a humbled one.

CARL LINDNER WAS THE LAST IN A LINE
of strongmen who ran—sometimes for the public good, sometimes simply for profit, but most memorably out of pride and greed—United Fruit. The Lindner era ended, appropriately enough, with a frank—perhaps for the first time ever—admission on the part of the company. While previous corporate histories had omitted or quickly glossed over the company's checkered past, a new document, issued as part of a “corporate responsibility report” alluded, for the first time, to the company's
real
history—to the Octopus. (Such documents are offered by companies wishing to highlight the good they do. The issuance of such a report usually comes with the creation of an in-house oversight position. Whether these efforts are meaningful or just image doctoring varies.)

The 2003 report, 103 pages long, was—by American corporate standards—blisteringly frank. It began with a bold headline that read “Our Complex History,” under which the company attempted to summarize a century of adventures in a bit more than one hundred words:

The report went on to firmly establish, for the first time, a genuine ethics policy—and how it would be enforced—for the banana giant.

When I first read this statement, it struck me as an earnest, yet fitful embrace of more principled behavior. Though some activists argued otherwise, saying that the company's supposed reforms were more show than substance, Chiquita was generally perceived as having come a long way.

But in the past few years, that progress has slowed. The annual responsibility report has gotten smaller and smaller; it is now folded into the company's general annual report. In 2006 it spanned just three pages, with additional material online. What appeared to be an earnest attempt to do good now looks like a press release.