The decade of 1955 to 1965 saw the United Fruit Company start its transformation from the old school colonial company of the early 20th century and late 19th to eventually transition to the Chiquita of today. This eventually became necessary because of the changing times, attitudes, and political realities which made the United Fruit Company unpopular and unprofitable. In the company’s early years it had enjoyed the protection of the US and was able to avoid the problems that came with doing business in dictatorships. With declining US political and military support the company lost the ability to benefit from the system of dictatorships they had helped create and instead it forced them to evolve and abandon most of their central American land. The result was a focus on some of less risky, but also less profitable, parts of the banana business. Over the course of this period, the company withdrew from directly growing bananas on its plantations and concentrated on the purchase and marketing of bananas.1 Nonetheless, during this time the company reaches its height, employing 2,500 people in the US and exporting 80,000 stems of bananas per week.2
Despite these adaptations, the company faced other challenges. In November of 1958 Fidel Castro seized power from the Cuban President, Batista, who had been supported by both the US and the United Fruit Company.3 Castro soon nationalized all United Fruit Company assets in Cuba, which the US government was not able to prevent and which the UFC feared would be an example to the other central Americans countries. In that same year, Costa Rica passed new legislation forcing the United Fruit Company to significantly increase its wages. Both examples show how foreign governments were now able to change the rules to the detriment of the UFC.4
The 1960s were also a period during which the American government decided to follow a more worker-friendly policy in Latin America. Aware that poverty and poor working conditions made Communism attractive to working classes, the US government encouraged and endorsed agrarian reform programs in the region through the recently created Alliance for Progress.5 These agrarian reforms often went against the interest of the UFC and again showed the declining political influence of the UFC, even in the United States. This decade in general saw the rise of many leftist ideas and policies. The Soviet Union had recently taken over most of eastern Europe, Castro took power in Cuba, the gulf of Tonkin incident started major US involvement in Vietnam in 1964. During this same time, worker militancy and agrarian reforms become more popular and accepted in central America. These factors contributed to the decline in power of the UFC as the governments of the world no longer looked favorable on or supported them.
Another cause of the decline of the UFC was the enforcement of existing US laws, particularly in regard to monopolies and business practices in other nations. For example, in 1959 a lawsuit was brought against the UFC challenging the company’s practice of requiring central American railroads, in which the company held subsidiary interests, to offer services at below market rates.6 Similarly, in 1958 a US government antitrust suit was finally settled against the UFC which resulted in the UFC being forced to sell land and foster competition.7 This decline in the ability of the UFC to sidestep US laws also greatly affected labor relations with the UFC, as the company was no longer able to use force to crush strikes. For example, in 1960 the first serious strike of the banana workers in Panama occurred. The workers of the Bocas del Toro Division demand higher wages and better working conditions. Shortly after they were joined by the Armuelles workers. The strikers paralyze all the export activities for two months and the UFC eventually gave in to many of the workers’ demands.8
The period from 1955-1965 also saw the United Fruit Company try reform their business culture and image. Whether this was because they could no longer get away with such activities or if it was because they saw the consequences of supporting dictators is hard to say. Nonetheless, many new policies and programs that were put in place or continued in this decade. For example, in Ecuador “They paid wages up to four times the going rate, provided housing, sold rice milk, and meat at cost, and built and staffed the best hospital in the country.”9 Believing that family and social cohesion would translate into peaceful labor relations, they structured compensation so that men could earn all a nuclear family needed.10 While eventually this proved to be too little and too late, it does show how the UFC tried to adapt to the changing times. However, these actions did not stop the negative attitude many people have towards the company or their eventual retreat from many areas in Central America.
1United Fruit Company – Chronology, www.unitedfruit.org/chron.htm., 5
2Rudi Colloredo-Mansfeld. 2002. “In the Shadows of State and Capital: The United Fruit Company, Popular Sturggle, and Agrarian Restructuring in Ecuador, 1990-1995 (Review)” 75 (3): 623-28. doi:10.1353/ang.2002.0042.., 6624
3United Fruit Company, 4
4Bucheli, Marcelo. 2008. “Multinational Corporations, Totalitarian Regimes and Economic Nationalism: United Fruit Company in Central America, 1899-1975.” Business History 50 (4): 433-54. doi:10.1080/00076790802106315.
5 Bucheli, 446
6United Fruit Company, 7
7United Fruit Company, 7
8Baud, Michiel. “West Indian Workers and United Fruit Company in Costa Rica, 1870-1940. By Aviva Chomsky. Baton Rouge and London: Louisiana State University Press, 1996. Pp. Xviii, 302. $35.00.” The Journal of Economic History, no. 02 (1997): 550. https://search.ebscohost.com/login.aspx?direct=true&db=edsrep&AN=edsrep.a.cup.jechis.v57y1997i02p550.551.01&site=eds-live., 523
9Rudi, 624
10Rudi, 624
