Before Blackwater Had Xe, PM Had NewCo

First of all, we want our name changed from 'cockroach' to 'companion beetle.'After years of bad press over no-bid contracts and massacres of Iraqi civilians, the private military contractor Blackwater Worldwide has changed its name to the cryptic "Xe" (pronounced "Zee"). In an eerily similar move, disgraced sub-prime mortgage lender Countrywide announced that its new name is the smooth-sounding "Bank of America Home Loans." Rounding out the triumvirate of chameleons, Baghdad's Abu Ghraib Prison, made infamous worldwide for the torture and abuses perpetrated inside its walls by both Saddam Hussein and the U.S. government, is changing its name to "Baghdad Central Prison."

As with so many slick public relations tactics, the tobacco industry paved the way. In 2003, tobacco giant Philip Morris (PM) officially changed its name to "Altria Group," a nondescript moniker devoid of negative connotations. PM's name change came after BusinessWeek published a devastating article in November 1999 titled, "Philip Morris: Inside America's Most Reviled Company."

Corporations typically give nebulous reasons for changing their names; the change will help the company "better define" what it does, or "clarify" a shift in services. As a Blackwater / Xe spokesperson claimed, "We've taken the company to a place where it is no longer accurately described as Blackwater."

But, in the corporate world, where your brand is everything, re-naming an established brand is a desperate, last-ditch move. Far from a renewal or rebirth, it's more like a politician who, when embroiled in scandal, quits to spend more time with his family.

What's in a name change? Everything, and more

One particular Philip Morris document provides insight into the name-change strategy, better known in the PR world as "repositioning" or "re-branding."

PM first came up with the idea of changing its name in the early 1990s. An untitled December 1993 PM report describes a high-level meeting held that month at a conference resort in Leesburg, Virginia, to address PM's sagging credibility and an accompanying slump in employee morale. Top PM executives, senior representatives of PM's corporate headquarters and PM's longtime public relations firm Burson-Marsteller all attended, to discuss "the proposed repositioning of Philip Morris Co." According to the meeting report, they felt that PM needed to change the perception of itself as "just" a tobacco company. One proposal for how to do this was to change the company's name. While a drastic step, PM accepted it as their only real option, and proceeded to debate how to kick off a new image for the company soon-to-be-formerly-known-as-Philip-Morris (referred to in the report as "NewCo").

Manipulating employees and the public

Through its name change, PM sought to influence the behavior of its current, past and future employees. They wanted employees to start "engaging in good word-of-mouth about the company, selling us both inside and outside the organization, actively investing in the organization." PM also wanted to increase its appeal to college graduates looking for employment. PM management did not want employees to see themselves as "belonging to a tobacco company." Instead, they wanted employees to see themselves as part of a larger company "whose best days are ahead of it."

With retirees, PM wanted them not only to maintain their investments in the company, but also to suggest the company to others as a solid investment. PM wanted institutional investors to "no longer [see] us as a tobacco company," but "as a company with a bright future and relatively low risk."

PM's other goals included boosting its sagging credibility among policymakers, universities and medical centers, which at the time were reluctant to associate with the tobacco giant. PM was sure that "key universities and medical foundations" could be persuaded "to invest in NewCo." Attendees of the PM strategy meeting predicted that, three to five years after the repositioning, PM would be "able to secure endorsements from organizations who do not endorse us today."

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One critical barrier is that, after the repositioning, "NewCo will be instantaneously perceived as 'a tobacco company' -- No gain, Lots of pain!" Other concerns listed include that the repositioning "could make the company look desperate," and that the "repositioning could hurt food [units] as it is formally linked to tobacco under NewCo."

Despite its name change, PM is now more "tobacco" than ever before, having spun off its giant food subsidiary, Kraft, and acquired U.S. cigar maker John Middleton, Inc. in 2007, and smokeless tobacco company U.S. Tobacco in 2009. But to the extent that the name "Altria" doesn't have a connotation to most people, it doesn't have much of a public face, either. In this context, the name change seems to have served PM well.

Reinforcing executive egos

Indicative of the attitudes and egos of Philip Morris executives is a brainstorming session described near the end of the document. Under the heading "Ideas for Launching NewCo," are the following bizarre and at-times grandiose proposals:

  • Buy out the Superbowl
  • Involve Howard Stern
  • Build empty stadium...Fill stadium with Jell-O
  • Own the Olympics
  • Involve Rush Limbaugh
  • Sponsor rave parties

Last but not least, there's the idea of PM "starting an international homeless program."

Don't forget the Web!

As PM drew closer to actually changing its name, the company code-named the effort "Project Capricorn." (We weren't able to find out why they selected that particular name.) One of their first moves was to purchase a long list of Internet domain names that were in some way related to "Altria." A somewhat humorous two-page document titled "Capricorn Domain Names" lists all the addresses that PM scooped up in advance of the name change. They include various misspelled versions of "Altria" and a long list of derogatory domain names critics might try to register, like Altriakills.com, Altriasucks.com, and Altriastinks.com, along with the .net and .org versions of each.

It's all in the perception

These documents make clear that Philip Morris' name change was a risky bid to escape its long-standing negative identification with cigarettes, cancer and death. News coverage of the recent Blackwater, Countrywide and Abu Ghraib re-branding attempts generally acknowledged their desire to escape unsavory pasts, as well.

What's less obvious -- but spelled out in PM's papers -- is that name changes also affect a company's ability to recruit and retain talented employees, boost investor confidence and employee morale, and influence policymakers. PM also clearly sought to stymie "pressure groups" that, after the company's repositioning, would be instructed to "address themselves to our business units -- not NewCo."

Will Blackwater and Countrywide also use their new names to try to avoid accountability and obscure their past deeds? Only if we let them. A good model for rejecting such repositioning is the human rights activists who -- after the notorious U.S. military's School of the Americas training center changed its name to the "Western Hemisphere Institute for Security Cooperation" -- concluded, "new name, same shame." After all, no major institution changes its name when things are going great, if you "Xe" what I mean.

Comments

You were doing good until the final paragraph, which reflects an absolute lack of research and knowledge. The US Government closed the Army's School of the Americas and opened the Western Hemisphere Institute for Security Cooperation. Those activists you refer to didn't know anything factual about the school, and they certainly did no research on the institute, so they could continue their fraudulent 'movement' against US foreign policy in the region. Trouble is, the policy had changed already. The government closed the school and opened the institute to get away from the name itself, but so the security cooperation that almost everyone likes could continue. There has never been one example of anyone using what he learned at the school to commit a crime, so you miss the entire point of the creation of a new organization. And, as I have offered to others of your organization in the past, come see us and see for yourself who we are and what we do. We are open to visitors every workday. Sincerely, Lee A. Rials Public Affairs Officer Western Hemisphere Institute for Security Cooperation

So Mr. Rials you say that there has never been an example where a student has used what they were taught at the school to commit a crime, right? Well what is your definition of a crime? Do you mean to say that killing harmless civilians in the name of the United States' national security is not a crime? It seems that our government refuses to admit that they as a whole or certain individuals within its constrains committed a crime, i.e. torture, killing innocent civilians, starting unjustified wars, and lying to the UN security council. At what point does our government admit these crimes and punish the criminals within our government according to international and domestic law?

I have worked in public relations for 20 years and it never ceases to amaze me how many stupid, naive, misinformed people are still breathing out there. In an ideal world, there would be no wars, no poverty, no jealousy, no haves and have-nots, no philosophical differences; the whole world would just get along. It would be perfect, but it is never going to happen. All the social conditioning and political correctness in the world is never going to override millions of years of genetic human instinct; namely fear, greed, and survival of the fittest. Mr Rials is correct. People want security, but they don’t want to know how it is delivered. In another example, people want to purchase their steak and chicken at a reasonable price, but they don’t want to see the growing conditions or killing process that puts the meat on their dinner plate. They want to send their Hallmark birthday cards, but they don’t want to see forests being cleared. Corporations and governments are easy targets for criticism, yet we all still buy food, send cards, and expect to live peacefully in our secure leafy suburbs. Governments do what they have to do to ensure the armchair idealists who have an opinion on everything but have no clue about anything, can drive their cars to the supermarket, buy the food they want to eat, as they sit in front of their flat-screen televisions in either air conditioned or centrally heated comfort. Sure things go wrong from time to time and we don’t need these always-right-in-hindsight idiots stirring up the other idiots. They are like monkeys in a tree; one starts screeching, so they all start screeching – regardless of the fact that there really is nothing worth screeching about. There would be no need for any PR campaigns at all if the 80 percent of the people in western countries simply got up off their arses and educated themselves about an issue instead of relying on a right or left leaning media for their daily dose of the ‘truth as they want it to be.’ If I could rely on the majority to be able to see a balance in any argument or government initiative, I would not need to ‘sell’ an alternative point of view to critics of an idea. No legitimate companies or organisations, I repeat, no legitimate companies or organisations hold meetings with an agenda item that says – how do we screw the consumer. Even with the best intensions, sometimes things go wrong, or an outcome occurs that was not anticipated. These are mistakes and everyone makes them. I hate to break it to the idealists reading this, but there is never going to be a risk-free endeavour. If a bus hits a person, as he or she crosses the road, do we say we are going to take all the busses off the roads so it never happens again? No. Of course we don’t. In a war or security environment, innocent people are sometimes affected. This, unfortunately, is the price we have to pay. Sir Winston Churchill summed it up best of all when he said that the truth is so precious, it must be protected by a bodyguard of lies.

<i> -- I have worked in public relations for 20 years and it never ceases to amaze me how many stupid, naive, misinformed people are still breathing out there. </i> So it must feel good to vent your true feelings now and then, as relief from the PR person's mandatory perpetual smiley face. <i> -- Governments do what they have to do to ensure the armchair idealists who have an opinion on everything but have no clue about anything -- </i> Do their best, with the help of folks like you, to make sure we never <i>do</i> get a clue. <i> -- can drive their cars to the supermarket, buy the food they want to eat, as they sit in front of their flat-screen televisions in either air conditioned or centrally heated comfort. </i> Actually, our house is wood-heated and we grow a lot of our own food. But okay, I'll trash the flat-screen and dig the old CRT out of the attic. <i> -- No legitimate companies or organisations, I repeat, no legitimate companies or organisations hold meetings with an agenda item that says – how do we screw the consumer.</i> Of course not. It's all mission statements and customer bills of rights and fair labor practices and what-have-you. It's what they actually do when push comes to shove that's at issue. Don't read their lips, watch their hips. <i> -- Sir Winston Churchill summed it up best of all when he said that the truth is so precious, it must be protected by a bodyguard of lies.</i> Wow -- talk about weasels guarding a henhouse!

You have been mislead. Crimes comitted by corporate & government proxies are not for our benefit. Their only concern for our standard of living is to maintain a level that discourages open resistance to their activities. What happens when they run out of foreigners to rob and rape? That's when it is your turn in the barrel.

He was talking about war and keeping info from enemies. Of course, maybe I forgot that we take corporate endeavors/competition as if they are operating on a war footing. As moral people, perhaps we might try to rethink that.