New Top Banana

Most executives would think at least twice before agreeing to take over the management of a multinational food company plagued by heavy losses, bitter internal feuds and a sensational international bribery scandal. When Wallace W. Booth was first offered the chief executive's job at United Brands Co. two months ago, he promptly declined. Booth did not feel that his experience suited him for running a food company. During 20 years with Ford Motor Co., he played a major role in setting up the company's financial control system, became a director and eventually headed Ford's Australian subsidiary. In 1968 Booth joined the Rockwell International Corp., a Pittsburgh-based company that manufactures such durable goods as missiles and other space vehicles, gears, filters and textile machinery.

Second Wooing. But after seven years with Rockwell, Booth, 52, was at a crossroads. He had resigned as a senior vice president, director and member of the executive committee at Rockwell, where the chief executive was only two years older than he. "I didn't see a clear path to the top," Booth says. So when United Brands asked him a second time to head the company, he agreed, and last week was elected president.

Booth steps into one of the hottest spots in U.S. business. United Brands lost $47 million in 1974 (on sales of more than $2 billion), as both of its main businesses--John Morrell & Co., a meatpacking firm, and Chiquita bananas --turned down. The losses were caused chiefly by Hurricane Fifi, which destroyed 70% of United Brands' banana crops in Honduras, and a sharp rise in the cost of cattle feed.

The company has had no leader since the February suicide of Chairman Eli M. Black, who had created United Brands in 1970 by merging his own AMK Corp. with United Fruit Co. A Securities and Exchange Commission investigation into Black's death uncovered a $1.25 million bribe United Brands had paid to a high official in Honduras in order to win a reduction in export taxes on bananas (TIME, April 21).* Last week the company disclosed that the U.S. Attorney in New York had subpoenaed documents relating to other possible payoffs in Italy, West Germany, Panama and Costa Rica.

Following Black's death, a long-simmering power struggle on the 14-man board intensified. On one side were supporters of Norman Alexander, chairman of Sun Chemical Corp. and a longtime friend of Black's who had joined the board to help find a successor. Opposing Alexander was a faction backing Edward Gelsthorpe, 53, United Brands' executive vice president and chief operating officer. He ran the Boston office and was the man considered most likely to succeed Black. As United Brands' losses mounted, the two men clashed so often that Black threatened to fire Gelsthorpe.

Black's critics charge that he was unable to delegate authority or tolerate dissent. Some of them also claim that he was severely debilitated during the last months of his life by reliance on a sedative and that he took it in large doses that affected his memory and judgment. Black's supporters, on the other hand, claim that Gelsthorpe and his allies in Boston cooked up a "Caine mutiny" against Black. The friction got so explosive that at one board meeting, when a director called in from a yacht in the Caribbean to vote for a slate of new board members endorsed by Alexander, one of Alexander's opponents ripped the intercom from the wall so that the vote could not be recorded.

Boardroom Detente. At length Gelsthorpe concluded that to stop the quarreling "it was imperative that this company bring in somebody not in any way involved in the events of the past months." His opponents agreed, and the board united to choose Booth and Detroit Investor Max M. Fisher, one of United Brands' biggest stockholders, who becomes acting chairman. In private, each faction still disparages the other; yet the rivals are at the same time happy with Booth's selection, because it means that neither side won.

Booth's first task will obviously be to stop the feuding, and it will test the decisiveness that has earned him a reputation for sometimes being abrupt and abrasive. "I could settle something with him in ten or 15 minutes that would take three hours with almost anyone else," recalls a former colleague, "but I never went to him with a half-formed idea." Beyond knocking heads together, Booth faces a formidable array of challenges. The company is negotiating to sell off all its holdings in Panama; the discussions were interrupted by the bribery scandal. In connection with the bribes, at least seven stockholder lawsuits have been filed; and in addition to the U.S. Attorney's office in New York, the SEC and a Senate subcommittee are also investigating the company's affairs. Financially, United Brands is saddled with high interest payments on a heavy long-term debt, and it has scared off some investors: for the past few months, some mutual funds have been hurriedly unloading United Brands stock.

*In Honduras, a six-member committee investigating the bribe concluded that the recipient had been former Economy Minister Abraham Benna-ton Ramos. He and Honduran Chief of State Oswaldo Lopez Arellano were both ousted from office last month in the wake of the scandal.

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