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Companies Renamed To Hide From Bad Reputations

We’ve all seen company name changes like Cingular to AT&T and WWF to WWE. Sometimes these changes are funny, like how Radio Shack wants to become “The Shack.” Sometimes though, the company makes the change in an effort to distract customers from something really bad. Here’s a few examples of companies who want you to forget and one company that changed their name just in time to avoid scandal.

Blackwater to Xe


markhillaryIf you were hiding under a rock, you may have missed the whole scandal surrounding the government’s use of a private security company to help in the Iraq war. The company, Blackwater, found itself in some hot water after a September 2007 incident that left 17 unarmed Iraqi civilians dead.

In February of 2009, the company tried to help escape their association with the incident by changing their name to Xe (pronounced zee). The name change has so far been completely ineffective, as the state department has decided to no longer work with the company and the company’s founder, Erik Prince, is now being accused of murder after two past employees swore that he eliminated people who were cooperating with a federal investigation of Blackwater.

Source Image Via Markhillary [Flickr]

Philip Morris to Altria


Phillip Morris cigarettes may still be around, but the corporation (which owned Kraft foods at the time of their rebranding) is now called Altria. It seems no coincidence that the name change took place the same day, the company was cleared of charges related to a woman’s smoking-related death. Chairman Louis Camilleri claimed the name change “marks how far we have come and gives us a framework for how much further we aim to go… this is the right thing to do and the right time to do it."

Unfortunately for Camilleri, it seems most people saw the name change as a pathetic measure to escape the company’s bad reputation. After all, this was the same company whose president swore to congress in 1994, "I believe nicotine is not addictive.”

Source #1, #2

ValuJet to AirTran


The last thing an airline wants to be associated with is a plane crash, but that’s just what happened after ValuJet Flight 592 crashed in the Everglades in 1996. All 110 passengers died and, due to the location of the crash, collecting the remains proved to be a notable challenge. When investigation reports came out, it was revealed that ValuJet’s maintenance contractor, SabreTech, was responsible for the dangerous cargo conditions that led to the accident. SabreTech faced both criminal and civil charges for the incident and subsequently went out of business in 1999.

As for ValuJet, they never faced charges, despite their poor safety record at the time. Not surprisingly, when ValuJet merged with AirTran in 1997, they chose to give up their name in favor of the untarnished AirTran name.
Interestingly, this year AirTran was found to be the safest of 25 airlines in research performed by the Daily Beast.

Source

mciWorldCom to MCI


In the early 2000s, WorldCom was caught inflating their reported revenues in order to keep stock prices artificially high. The fraud ended up totaling around $11 billion, which sent the company into bankruptcy by 2002. Under the bankruptcy plan, the company had to pay out $750 million to the Securities Exchange Commission, who would then distribute the money to bilked investors. At the time, it was the largest bankruptcy of its type on record (this title was recently taken by the Lehman Brothers bankruptcy last year).

In the year following the scandal, WorldCom acted swiftly to take attention away from the scandal by moving their headquarters from Clinton, Mississippi to Dulles, Virginia and by changing their name to MCI, a company they acquired in 1997.

Source Image Via Mene Tekel [Flickr]

Andersen Consulting to Accenture


mrkathikaAccenture is the only company on the list who didn’t change their name after something bad happened –in fact, they were lucky enough to do it just before something happened. In 1988, Andersen Consulting broke its business relationship with the Andersen accounting group. Under their agreement, the company could keep their name, for a set period of time. In 2000, the company was required to change their name, so they ended up choosing Accenture, meaning an “accent on the future.” A whole lot of people critiqued the new name as a generic corporate word, and the company ended up spending $100 million on execution in what many people consider the worst rebranding attempt in corporate history.

Funny enough though, the name ended up being better than the Andersen Consulting title, as the Andersen accounting group ended up going down in flames for their part in the Enron scandal.

Source Image Via Mrkathika [Flickr]

So Neatorama readers, now it's your turn. What's your least favorite corporate name change?

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Newest 5 Comments

Emotion and poor research frequently drive company name changes more than good business decisions. KFC (Kentucky Fried Chicken), DQ (Dairy Queen) and IHOP (International House of Pancakes) all decided to go with what they thought people already called them (employees, management and regular customers naturally shorten long names simply to facilitate easy daily communication). But by listening just to themselves, these three removed any vestige of appetite appeal, uniqueness or personality (KFC, DQ and IHOP would be better names for gas stations or utilities than places to eat). Successful businesses look to make changes that will appeal to NEW customers -- current ones are already loyal and will stay that way if they aren't offended. Management is the least qualified to evaluate a new name because they're too invested, knowledgeable and biased.

Evaluating potential new names with focus groups is also a poor way to make decisions -- focus groups collect OPINIONS in a thoughtful, social, uncomfortable environment and do not measure BEHAVIOR (ask a focus group what's wrong with television and they'll emphatically tell you there's too much sex and violence -- let that information guide your programming and you'll wonder where your audience went!). Why? Because opinion rarely matches behavior. Measuring behavior has to be done indirectly and with a broad enough sample to be useful. Then, the questions have to be meaningful ("which of these two names do you like the best?" is irrelevant. "which of these two restaurants would you rather eat at?" starts to measure behavior). For example, I'm sure a blind research study of potential customers asking who would have better food; "CPK" or "California Pizza Kitchen" would reveal the limitations of the word Pizza in the name are a lot less than the penalties of turning the brand into an acronym (what all three aforementioned brands did).

"The Shack" is another misguided effort to get rid of "Radio" (it isn't about radios anymore -- it isn't a shack either). The name should have been changed fifteen years ago when Landor changed the identity to the circle R thing. But I'm sure executives yelled "Oh, no. We have enormous recognition and equity!" Yes. They do. Only problem is WHAT that equity is in. Bernie Madoff has recognition and equity, but I wouldn't want him as a spokesperson for my brand. His IMAGE is a negative and makes the recognition a liability. Radio Shack needs to rediscover their appeal and craft a new image that reinforces those virtues. A complete name change will have a short term price, but benefit more in the long term. (In 1998 I was involved in changing Budgetel Inns to Baymont to head off an increasing decline in business. For the first six months under the new name losses increased, but within a year revenues and profits significantly exceeded where they would have been had no change been made).

The same with UPS brown. Recognition? Yep. Image? Sure, if you like the postal delivery system of the government circa 1945. Park a FedEx truck and a UPS truck in front of your building and ask yourself which one will get your package there quicker, easier and more consistently? I feel sorry for the ad agency who had to run the campaign "What can brown do for you today?" Yuck! (as I understand it from the former chairman of UPS, they actually have a much better on-time record than FedEx, but I have to stretch to believe it based on brand imagery).

How about Kinko's becoming FedEx Office? Yes, Kinko's is a funky name. Yes, FedEx is a great name. FedEx/Kinko's was weird. But FedEx office is where I'd check on my packages and complain about services. Not where I'd expect to get a wide range of fast, economical printing services to supplement my desktop abilities. Is this management talking to themselves again?
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