How I became a made bananaman and discovered that Miss Chiquita was a government subsidy whore

As seemingly everyone in the two state area now knows, Chiquita is vacating the Port of Gulfport in favor of the Port of New Orleans and the Slabbed Nation is clamoring for some sage analysis.  As luck would have it, my becoming a bananaman derives from the same event from which the name of this website derives, Hurricane Katrina.  Everyone knows that Chiquita imports bananas into the US via Gulfport’s (soon to be New Orleans) Break Bulk cargo facility from Central America.  The company backhauls huge paper rolls to Central America that are used to make the banana boxes used for shipping.  Here is what my neighborhood looked like after the storm when the rocket scientists at the Port made the call to leave everything in place before the storm:

Intersection of US 90 and Broad Avenue after Hurricane Katrina / Slabbed New Media File Photo
Intersection of US 90 and Broad Avenue after Hurricane Katrina destroyed by Chiquita Paper Rolls stored at the Port  of Gulfport / Slabbed New Media File Photo

Most of the rolls clustered at Broad Street and Highway 90 but a few even made it to my neighborhood proper:

West Gulfport flattened by Port Debris and Hurricane Katrina / Slabbed New Media File Photo
West Gulfport flattened by Port Debris and Hurricane Katrina / Slabbed New Media File Photo

Naturally, having witnessed the destruction first hand coupled with nothing happening in the cleanup front I felt the need to agitate and since Chiquita was the only public company among the port tenants it was the CQB message board on Yahoo that I brought the full measure of five weeks of frustration.  Within a week or so of my arrival on the CQB cyber scene, I was met at my slab by a contractor on October 2, 2005 who was armed with an ROE and heavy equipment. Word got out among my old neighbors, additional ROEs were executed on the spot and we were fast tracked for cleanup.  This internet thing is like magic in skilled hands as the following video illustrates:

The end result was I ended up sticking around Chiquita swing trading the stock, mostly short.  The message board, then infested with insiders and former employers ended up accepting me as one of their own and I became a made bananaman, mainly because it did not take me long to figure out the CEO, Fernando Aguirre, was an overpaid incomp.  That is the history, well kinda, since I’m fairly certain one of my fellow message boarders from the old days outed himself to the Charlotte Business Journal a couple of days ago:

“Chiquita had great leadership,” he writes in an article for the April issue of FruiTrop magazine. “It created one of the most consumed fresh produce in the world.”

The company accomplished that by vertically integrating and creating high barriers to entry for competitors, he writes.

Paz questions some moves of the subsequent Chiquita management group, saying its decision to market pre-packaged salads didn’t help the company.

“Chiquita’s salad business has also proven to be a burden, depleting resources from the fruit business and exposing the company to a highly competitive environment with no clear advantage in sight,” he writes in the Eurofruit article.

Paz also takes some shots at Chiquita’s current management. (The company brought in turnaround specialist Ed Lonergan as CEO in October 2012, replacing Aguirre.)

“There is something fundamentally wrong when a leading fresh-fruit company has more lawyers than PhDs and many more accountants than agronomists and worse, when they represent the majority of the top leadership roles in the company,” he writes in FruiTrop.

Amen brother!!!!  The Fresh Express acquisition has been an unmitigated disaster as have all of Chiquita prior attempts to diversify from bananas and they have the Chapter 11 bankruptcies to prove it.

This brings me to the topic of this post.  You see folks, the tentacles of Slabbed New Media literally reaches to Coral Gables, Florida, one of the nicest towns in these United States and a favorite place to relocate worldwide corporate headquarters.  Back in 2006, Chiquita was headquartered in Cincinnati, Ohio, close to financier Carl Lindner, who was a major stockholder in the company.  That said, when the governmental incentives that came with locating Team CQB in Cincinnati were about to expire, chatter on the message board centered on Chiquita heading to Headquarters Row in Coral Gables. The problem with that was one of wishful thinking however because the good folks down in Coral Gables do not need to give away the farm to nab a worldwide corporate headquarters as the companies seem to come on their own without hat in hand. With Chiquita, it was no government subsidy, no dice so the company stayed a few more years in Cincinnati before moving to Charlotte, North Carolina. The Charlotte Business Journal gives the rundown on the incentives:

The recruitment of Chiquita marked the first time that Charlotte and Mecklenburg County had granted upfront money to a relocating company. Of the $22.7 million in incentives, the local governments agreed to pay Chiquita $1.75 million upfront.

As a part of the Charlotte move, Chiquita promised to stay in town for at least 10 years and spend at least $14 million for local operations. Other requirements included an average annual salary of $106,000 for local workers.

If the company doesn’t meet the requirement, it would have to return some or all of the incentives, Charlotte officials said.

That was 2012. Let’s circle back to the first Business Journal Article I linked to see what is happening in 2014:

Chiquita moved to Charlotte in 2012 and in March announced that it was buying Fyffes plc(ESM:FFY ID: AIM:FFY LN) and moving the headquarters to Dublin, Ireland, where Fyffes is now based.

It is against this backdrop that I viewed yesterday’s news that Chiquita was leaving Gulfport for the greener pastures of New Orleans and another government handout. Make no mistake, it is the government subsidy, not economics that is driving the decision per this pump of the deal yesterday by the NOLA Media Group:

As part of incentive deal, state will grant Chiquita $18.55 per twenty-foot-equivalent unit, for a total of $1.11 million to $1.45 million yearly, “to offset increasing shipping and handling costs” at the New Orleans port, officials said. The incentive package also includes the state spending $2.2 million on a port-owned distribution and ripening facility to be leased to Chiquita.

But when it comes to this type stuff the local media tosses skepticism out the window and turn into cheerleaders as this Tania Dall pump for WWL TeeVee illustrates:

After spending four decades away, Gov. Bobby Jindal announced Wednesday afternoon a reunion between Chiquita and the Crescent City.

“This is a huge, important, historic win for New Orleans and Louisiana,” Jindal said.

State officials say the move will mean a 15 percent increase in port container volume and 270 to 350 new jobs.

With Chiquita coming here to the Port of New Orleans, the Governor’s Office says it expects to see a $373 million to $485 million economic output over the next 10 years.

What is clear to me is that Bobby Jindal is using the same people to figure his jobs numbers as the Port of Gulfport did when Haley Barbour diverted the recovery money to Port expansion because Chiquita provided no where near the number of jobs touted by Jindal (as parrotted by shills like Dall) in Gulfport per Anita Lee’s report on this topic for the Sun Herald:

Chiquita employs about 80 local International Longshoremen Association union members, full- and part-time, for its weekly port calls. The company directly employed 20 in its state port offices.

The article goes on to quote a private business owner that employs 10 people that will be impacted as well so the math indicates Mississippi has lost around $1.3MM in annual rental payments plus somewhere between 100 and 110 jobs. To get that, Louisiana’s taxpayers are now giving Chiquita around $1.3MM in annual tax subsidies to nab those 110 jobs. Leaving aside the imaginary line that is the state line, this deal takes money out of the local economy on two levels. Perhaps that is why a fairly innocent tweet on the subject this morning has gotten a robust reception:

Unfortunately this is business as usual these days including here in Mississippi, which has its own share of spectacular MDA fueled taxpayer funded disasters.

Rosenfelt?  Bobby, please take the man back. Thank you.

10 thoughts on “How I became a made bananaman and discovered that Miss Chiquita was a government subsidy whore”

  1. This POST brings back some “bad memories” of the decision rendered by “the Muslim Federal Judge” on the Gulf Coast, which DENIED recovery to property owners whose property was DESTROYED by inadequately secured containers during KATRINA, which containers “escaped” from the Port of Gulfport, crossed the highway, and then demolished houses and other property. I commented on SLABBED at the time, but I NEVER, TO THIS VERY DAY, HAVE UNDERSTOOD THE MUSLIM’s DECISION. Maybe someone can enlighten me. Expert testimony could have PROVEN that properly secured containers WOULD NOT HAVE BROKEN LOOSE, even in a catastrophic storm like KATRINA. And it is my recollection that the Muslim DISMISSED the claims of the property owners on a “summary basis” WITHOUT ANY TRIAL. Shame, shame! Ashton O’Dwyer.

    1. The lawyers here like Judge Ozerden because he “lets the lawyers try their cases”. I agree with you that his decision in the port case could have easily gone the other way (and in my opinion, should have, but I am biased on that topic).

      Despite the Lebanese ethnicity exhibited in the name I have been assured Judge O is 100% Mississippi bubba.

    2. Ashton, why not call the judge by name or simply refer to them as an asshole?

      Saying “THE MUSLIM” makes you look like a bigoted idiot in spite of your useful insight.

  2. Fortunately, the Port of Gulfport’s current leadership team is the finest we have had in many many years. They will adjust accordingly and probably end up with a better tenant mix in the long run. In the short run there will be good news early next week with a substantial announcement that will overshadow the Chiquita deal. And Chiquita, if you think the Union business climate is better in NOLA than in Gulfport, I would compare it to dealing with a golden retriever vs dealing with a pit bull. That dog is gonna bite you and he ain’t gonna let go. 300 jobs? My ass Jindal!

  3. Yes, Louisiana will pay Chiquita more than $1 million per year, so essentially a free lease, but Mississippi is spending more than $500 million of federal money to expand the port yet could not hold on to a long-term anchor tenant. In one article, they mention shipping issues, especially expanded vessel capacity:

    “We are particularly excited about the enhanced service levels to our Chiquita and Great White Fleet customers that will result from this change in our shipping operations and expanded vessel capacity.”

    Gulfport gave “many years of great service,” a news release quoted him as saying. “This was a clear business decision for us surrounding our new shipping configuration rather than any dissatisfaction with the strong and economically competitive team we have had at Gulfport.”

    What he means is that the Gulfport ship channel is not deep enough for the larger ships they intend to use. That failure is on Haley Barbour and state officials. At every meeting, hearing, or conversation that Gene Taylor had involving the port from 2005 through 2010, he emphasized that the first priority should be to deepen the channel to 45 or 50 feet because shippers will go to the new maximum for the wider Panama Canal. He worked Congress; he worked the Corps; he worked the state and local officials. All the groundwork was done for the Corps to do the cost/benefit & feasibility studies that are the prerequisite to the project, but this could not be a 100% federal project. The state needed to commit to a cost-share for the dredging project and the maintenance (channels in the Mississippi Sound silt up regularly and relatively rapidly), but Barbour was only interested in spending the Katrina 100% federal money on the port expansion and the island restoration. So then Gene tried to get the state and the Corps to take advantage of the 100% federal money for the restoration of Ship Island to accomplish a two-fer by pumping sand from the ship channel for the island restoration, but to do this the Corps would require the state to pay any additional cost of pumping from the channel rather than from south of the island, and again the state would not commit.

    Side trivia note: Fulton, Kentucky has a banana festival every year, dating back to its part of the banana trade when United Fruit shipped to New Orleans. The rail cars would be loaded in New Orleans with the bananas on top of blocks of ice. By the time they got to Fulton, where the Illinois Central met the Gulf, Mobile & Ohio, the ice would have melted, so the trains stopped in Fulton to add new blocks of ice.

    1. Interesting side note on Fulton KY Brian. Ms. Chiquita was a lady back in those days.

      I took a peek at the 2013 10-K. I was there when Aguirre did a sale-leaseback transaction involving the Great White Fleet. It appears that transaction is unwinding and Chiquita is tossing the older ships it uses.

      http://www.sec.gov/Archives/edgar/data/101063/000010106314000023/cqb10konly-exhibit13123113.htm

      Footnote 13 contains the salient verbiage along with the numbers.

  4. Wow…I grew up right next to Fulton about 2 counties over in Ballard County. I knew about the Chiquita connection to the festival but I have never heard the ice melting story….that’s a great factoid.

    Great post, Doug.

  5. So where is the banana whore going to get da’ huge toilet paper rolls to take back to S. America?
    And has N.Carolina sued da’ whore to get the incentives back since the whore stayed only 2 of the 10 years it pledged to stay.

    Besides bananas are buggars picked too green and gassed to only spoil 3 days after you buy them and as such these are the BS foreign companies that can kiss my cajun ass. I’d much rather deal with the infamous Tomato Salesman ( Marcello who was a man of his word at least and gave out deep pockets of money rather then take in subsidies).

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