April 25, 2020
The United Fruit Company also known as the “The Banana Empire” was formed as a corporate in 1899 during at a time when there was a lot of political powers in America. The main objective for the company to be formed was to trade in tropical fruit only especially the bananas which were grown in the third world plantations that is the Central America and the Caribbean and then imported to United States of America 1870 and also Europe and they were considered to be luxury goods during that time.
Thousands of local workers got the employment opportunities in the company. With time, UFCO had become the major banana producing and marketing company controlling over 70 percent of the banana business hence expanding its services to other territories such as the Central America, the Caribbean coast of Colombia, Ecuador and the West Indies (Gray, 2000). Despite the elimination of other companies through the price wars, its main challenge was the New Orleans based Standard Fruit Company which had gained its supremacy in International banana trade too.
Close involvement with local dictators such as Jorge Ubico tarnished the company’s reputation in Latin American with promises such as low taxes, duty free imports and low wages for workers. It is said that, $60million had been invested in the country by UFCO with telegram and telephone facilities, railways and large fleets of ships being owned by the company. This dictatorship closeness main target was due to the ways of generating some economic stability in the U.S.
In order for this to be achieved, close relationships was formed between the local landowners and the foreigners against the workers so as to provide stable income however if the outcomes were to be vice versa that is bear no fruits, their relationship could be broken or end. Apart from that, they believed new legislations could be put in place without any opposition. This became possible because the economic gain was to be achieved through foreign operations corporations.
Being one of the biggest companies in the U.S, Its location became a challenge since there was no enough labor force that could perform all the tasks available. With the challenge a head, they decided to import the blacks from the West Indies. This brought some misunderstanding among the workers whom their main complain was the issue of hiring workers from West Indies. To them, they felt that UFCO was going against the Guatemala laws which stated that 90 percent of the company’s workers should be Guatemalan even though by 1940s and 1950s, the complaint had seized due to the workforce of the foreign workers going down. (Batres, 1995; Bucheli, 1996).
Working with UFCO to most workers was one of the things they never regretted because of most of the benefits they got from the company such as its better working environment and better payments to its workers compared to most of the companies in Guatemala. This happened after the May to June 1954 strike of which the workers went on strike demanding higher wages of which an agreement of 21 percent was settled from their original 71 percent demanded by workers (Bucheli, 1996). Despite the payment of the workers being below the U.S minimum salary, many indirect salaries were given by UFCO through maintaining cleanliness in the environment with also provision of clean water to its employee’s hence better health to the workers.
Barrack like houses were also offered to the workers and their families for the shelter purposes. Not only shelters which were provided but also primary schools were set up to cater for the children of the workers. Food wise, workers were advantaged because they were allowed to buy foods such as corn, beans, and other staples at a lower cost. Plots were provided to workers for their own personal use which gave them the opportunities to plant their own food to keep them going.
With all the benefits above, it is said that when the deal is too sweet, think twice, by this all that is meant is that, not all the workers gained the same quality of indirect benefits (Gray, 2000). For Some workers, they were considered to be inferior whereby the utility services provided by UFCO to most of the houses were below the expectations for instance, power was never available at times, the electricity could be switched on only on weekends to some workers, while other houses had enough water and other houses lacked these privileges.
With the increase in salary, to some workers, the salaries never benefited them at all in terms of their needs hence demanding every now and then the increase of their salaries (Users.polisci, 2011). These basic needs that affected their demand for more wages were the living conditions in some areas which were considered to be much higher than other parts of the country. Lack of enough security also became a burden to other workers hence affecting their wages in terms of spending to provide themselves with enough security.
According to McCracken, (1998) provision of work daily was never an assurance because of the nature of banana work and period whereby cutting of the stem could even happen once a week and also working on the other days could depend on the time taken to clear the land. Another factor that affected the assurance of the work was the arrival of the bananas and ships. This could put workers idle for quite some days all in the name of waiting for sirens to alert them as a sign of availability of work. Late arrival of the workers to the venue could also be denied the work to be performed that day by their seniors. So suppose to be alert whenever they heard the siren.
When the issue of paying the workers could arise, most of the workers were being affected due to them being sucked in order to lower their salaries. Apart from the high demand of the salaries, presence of technology also led to the sucking of some workers. It is estimated that from they year 1946 to 1954, the total number of UFCO workers has decreased from 15,000 to above 9,000 (Batres, 1995).
Between 1950s and 1960s, banana consumption in the U.S. became a major challenge to the company with most of the American citizens replacing it with canned fruits. Apart from the consumption of banana, anti-trust regulations had to be adhered to by the United Fruit Company through getting rid of some part of the land they owned. Political developments in the country became a major threat to the company (Users.polisci, 2011). This was after a new legislation was put in place by Castro which its main target was to ensure the increase in the salaries to the workers hence putting company’s investments at risk. With these happenings, the company admitted to come to terms to the social and political changes in the U.S.
By 1970 UFCO became partners with AMK Corporation hence forming a new company known as United Brands, which by the time comprised 17 firms with 31 affiliates in seventeen countries (Constance, 2010). This saw the growth of UFCO again back to its roots through processed foods and meat packing. In 1972, the UB decided to sell their Guatemala to Del Monte Company. This became a threat to UFCO apart from the other competitors, the Standard Fruit. Reasons for selling this was due to mistrust which was targeted to the UFCO by the U.S. Justice Department, which insisted on the company’s going against the rules of the 1890 Sherman Antitrust Act And Wilson Tariff Act hence questioning its supremacy of the banana industry (Constance, 2010).
During the same year between 1972 and 1973 when there was the existence of the oil crisis, the company started to have some attitudes towards some improvements with the region by improving both working and social conditions of the employees. In 1974, another challenge was seen when the company reported a loss of $ 43,607,000. This was due to the weather conditions and the “Banana War” from the agreements made between them and the government which were meant to increase taxes and fees (Bucheli, 1996).
Another thing which was considered to be a threat to the company was the higher demand of the organic products by consumers. This had become a major concern especially keeping in mind that bananas grew according to the seasons.
With all the happenings about the UFCO, It can be concluded that UFCO through its existence, it has managed to abuse its economy hence affecting most of the individuals in the U.S. This was as a result of labor movement repression and contribution to corrupt judicial systems. Despite all that, the strengths which are strong market position and wide geographical base combined with its opportunities which are banana import regimes and weak profitability not leaving behind the threats which comprises of growth in private level products and higher demand of organic products and finishing up with the weaknesses such as oil crisis, regulations and legal proceedings have enable the UFCO to re-evaluate itself and over the years it has been able to improve on their products by introducing things such as processed fruit cans, canned meat so that they can be able to compete with in the market and the world (Macadam, 2010).
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