Photo: Getty Images/Mario Tama
When Research In Motion unveiled its long-delayed BlackBerry 10, it also announced it was changing its name to BlackBerry.CEO Thorsten Heins argued that the new name reflects how the company had “transformed [itself] inside and out.
See the companies that took new names >
By choosing a different name, companies hope to convey their transformation and focus. But often that desire for a renewed image is a last ditch effort to breathe life in an irreversibly damaged brand. 24/7 Wall St. has reviewed major corporate name and brand changes over the past few years. These are seven companies that were forced to change their name.
There are several reasons a major corporation decides to take the leap and change its moniker. In many cases, it is to make the name more attractive across a wider market. This happened when the company known a BackRub changed its name to Google Inc., or when “Jerry and David’s Guide to the World Wide Web” changed its name to Yahoo! Inc. Sometimes, the change is an attempt to modernize, and is often as simple as just shortening the name or removing words, as was the case with Apple Computers changing its name to Apple Inc. and Federal Express changing its brand name to FedEx Corp.
While there can be many valid reasons for companies to change or tweak their names — be it startups that grow up, established companies that match their names to their customers’ expectations, mergers and so on — we have focused on those companies that had to change their names to stop declines or even stay in business.
For some of these companies, a single incident precipitated the name change. In 1996, a ValuJet DC-9 crashed in Florida, killing 110 people. The Federal Aviation Administration investigated, and after grounding the airline for three months, determined that the carrier had deliberately allowed unsafe planes to fly. ValuJet eventually acquired smaller airline AirTran, and to distance itself from the brand it took the acquisition’s name.
In other cases of forced corporate name change, it was not a single incident, but a period of inconsistent management, bad press or both that led to the decision. In 2010, the struggling lender formerly known as GMAC became Ally Financial. GMAC had been hit badly by the subprime mortgage crisis. Despite receiving a $17.2 billion bailout from the Treasury, it continues to struggle, failing a federal stress test last year.
A corporate name change is meaningless unless consumers believe there is actually a new product behind the new name. In an interview with 24/7 Wall St., InterBrand London CEO Graham Hales explained that in this age of transparency, a simple name change is not going to turn your company around. “If you’re going to change your name, you’ve got to have a strategy which is changed in line with it, and too often companies change their name and the focus point becomes why they changed their name, and not about what is different about the company,” said Hales.
It remains to be seen whether Ally Financial, or the infamous military mercenary contractor formerly known as Blackwater, which has now changed its name twice, has followed that advice.
These are the seven companies forced to change their names.
Former name: GMAC
Year changed: 2010
In 2009, GMAC changed the name of its banking unit to Ally Bank. The decision was made to distance the company from its longtime association with government-owned General Motors Co. as well as its own bailout. The next year, GMAC, which in addition to an online retail bank also provides auto and mortgage lending services, changed the name of its entire business to Ally Financial. But under both names the company has struggled despite receiving $16.3 billion in TARP funding. Of this, nearly $10.5 billion remains outstanding, while the U.S. Treasury holds a 74% stake in the lender. Last year alone, the company failed a Federal Reserve stress test evaluating its ability to survive another financial crisis. In May 2012, its mortgage lender and servicer, Residential Capital, filed for bankruptcy.
Former name: World Wrestling Federation
Year changed: 2001
The popular entertainment company once known as the World Wrestling Federation, or WWF, had to change its name for a much different reason -- trademark violation. Very few multimillion dollar companies come across such a problem. But World Wildlife Fund for Nature, a global conservation organisation founded in 1961 that carries the initials WWF, sued the entertainment group in 2000 and won. A british judge ruled in 1994 that the initials belonged solely to the conservation group, but the organisation now known as the WWE, or World Wrestling Entertainment Inc., continued to use the initials through 2002. That is when the United Kingdom's Court of Appeals upheld a 2001 ruling that the corporation had been in violation of the 1994 settlement. The WWF changed its name and abbreviation, and continues to be extremely popular as the WWE.
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