American corporations that go through bankruptcy or bad press because of scandals, accidents, or some sort of incompetence, do something that is common: they change the name of their company. In essence, they try to cover up their past and hope that the American public will forget about their bad reputation and ineptitude. Rebranding is common, especially during a recession where many corporations struggle. Rebranding may be deceitful, but at the same time it is a smart marketing ploy. Today, we are already starting to see the rebranding of financial institutions. American International Group (AIG) has been renamed to American International Underwriters (AIU), Countrywide Financial has been renamed the Bank of American Home Loans, GMAC has been rebranded Ally Bank, and the list goes on and on.
I used this rebranding technique with some success on one project during my corporate days. I was chartered to build a high speed digital test extension to an existing internal test platform. To do so, I had to work with several outside vendors. The initial proposal for the “Supercharge VLCT” project went before my big bosses and one outside vendor in particular did not heed my advice for handling our “price sensitive” brass. Thus, they rejected the proposal and said we should kill the project. I do not give up easily, so I changed the contractor and changed the name of the project to the “Agilent I/O Module” and this proposal went before our gullible brass. I told them that this was a completely new concept, although it was the same concept with different people. It worked and they approved the project. During the development of the module, the project began to get a bad reputation. The cost began to rise and the scheduled began to slip. Once again, the corporate brass decided to kill the project. I made adjustments to control cost and the schedule and went to the corporate brass with a new project proposal called “VeLoCiTy”. Once again it was the same project with a different name, but my gullible corporate leaders thought it was completely new. The third time was a charm, and the project was completed and implemented. Essentially, I understood my bosses were incompetent, impatient, and penny pinchers. Thus, I had to change directions and manipulate them to get the project complete. Yes, if I did not have to outsource so much of the project and I had more control, it could have been successful on the first pass. However, I did not have this option afforded to me so I had to do whatever necessary to get the project completed.
There are many different reasons for rebranding. After ValueJet crashed a plane in the Florida Everglades they changed their name to AirTran. It was a necessary change because ValueJet was found guilty in the wrongful death of 110 passengers, since they illegally stored oxygen canisters that had ignited. Phillip Morris who has been sued numerous times changed the name of cigarette manufacturer to Altria, and Blackwater, the security company supporting troops in Iraq, changed its name to Xe after being investigated for the wrongful death of 17 Iraqi civilians. I would not be surprised to see a name change for GM and Chrysler and their brand of vehicles in the near future.
The American consumer needs to be vigilant to avoid any of these rebranded companies until they are deemed as financially and consumer stable. The good news is that our government is too stupid to try this technique because I doubt they will change the name of Fannie Mae and Freddie Mac. Obama and his administration of czars are too inept to do this. Fortunately, in this instance, incompetence is a good thing.
My Blog: http://patrickbohan.blogtownhall.com/ (The Theory of Mediocrity)
My Book: Is America Dying? (Amazon.com, Barnes and Noble)