As the scenario for an underground comic book, the story would sound unreal: a U.S. company widely reviled in Central America as an exploiter of plantation laborers runs into a rising tide of Third World nationalism. Workers turn intransigent, and profits slump. Then a secretary interrupts a board meeting in Boston with news that an unknown buyer has cornered a huge block of the stock. He turns out to be an ex-rabbinical student who ousts the old management and transforms the company into an empire of steers, root-beer stands and ice-cream parlors. South of the border, he speeds the replacement of Yanqui plantation superintendents with native managers and raises wages sharply. Peace, harmony and profit reign.
In fact, that is a condensed version of what has actually happened to United Fruit Co.famed in the U.S. for Chiquita bananas, but known to generations of Latin Americans as "el Pulpo" (the Octopus). The Talmudist is Eli Black, who in 1970 merged United Fruit into a food-based conglomerate that he was assembling, and has proceeded to change its operations, its image, and even its nameto United Brands Co. The payoff: United Brands has gone from a net loss of $24 million in 1971 to a net profit of $10 million for this year's first half alone. Last year sales rose 13% to nearly $1.7 billion, less than a third of it from bananas.
The United Fruit takeover made 52-year-old Eli Black one of the nation's largest conglomerateurs, and certainly its most mysterious. After graduating from Manhattan's Yeshiva University in 1940, he turned to investment banking, and in the late 1960s helped combine a group of small manufacturing companies into AMK Corp. As AMK chairman, he quickly transformed the company into an $840 million-a-year giant by acquiring John Morrell & Co., an ailing meat packer. He then noticed that United Fruit was ripe for picking: its earnings were dwindling, but it had cash reserves of $100 million and no debt. So AMK bought 733,-200 United Fruit shares10% of the totalin a single block on the open market, in one of the largest transactions ever to appear on a stock-exchange tape. Black then outbid two other conglomerates, Zapata and Textron, for a controlling interest, and AMK became United Brands.
Black, now United Brands' chairman and president, has begun replacing the company's aging banana boats with modern container vessels. He has settled several antitrust suits, which were draining the firm of $ 1,000,000 a year in legal fees, by selling its Guatemalan banana division to Del Monte. In Central America, United Fruit had long been improving company-paid education, housing and medical care for plantation hands; Black has redoubled those efforts.
The company has begun turning over much of its 540,000 acres of Central American holdingswhich are largely in Costa Rica and Hondurasto local governments, and Black says that in the future it will concentrate on transporting and marketing rather than growing bananas.
Black is also steadily reducing United Brands' dependence on Chiquita. In 1969 the company picked up the Baskin-Robbins chain of 1,121 ice-cream parlors and A & W International, the root-beer chain. Now, he says, he has been arranging joint cattle-raising ventures with a number of Latin American countries, which he will not name.