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C. Paul Luongo's Published Columns

Friday, September 08, 2006

Corporate Names

Corporate Names

Avaya. Verizon. USX. NStar. And now Altria.

What’s going on here? Corporate names are being changed to “reflect their true meaning”.

Really? Let’s take a look.

Does Avaya spell Telephones to you? And furthermore if Avaya is in the communications business why is it that when you call the company headquarters in Basking Ridge, New Jersey at (908) 953-6000 and ask for Donald K. Peterson, President, they will not connect you to him or even take a message. Imagine that?

Is Verizon better than New England Telephone?

And does USX mean U.S. Steel? “X” has come to stand for X-rated not steel. Or how ‘bout Nstar for Boston Edison. It sounds much more like the name of a constellation than a utility company. Is Noveon the best one for that all-American name, B.F. Goodrich?

Corporations are paying millions of dollars to “communications experts” for coming up with names allegedly more suitable and better representative of what the company’s activities really are.

I daresay that if I took a street survey and mentioned any of the above names, most people wouldn’t recognize them for what they are.

Our world has changed since September 11th and we need a sense of stability and reassurance. Our firefighters, policeman and EMS people, along with the rest of the country, like our old fashioned, familiar, American names and take comfort from the fact that they are still around. Names like PepsiCo, Coca-Cola, Kellogg, Campbell Soup, Sara Lee, Wrigley, Smuckers and Tootsie Roll are all publicly traded companies and doing well, thank you very much.

Recently I received a letter from Geoffrey C. Bible, Chairman of and Chief Executive Officer of Philip Morris Companies Inc. and he explains the name change to Altria:

· “The name change is designed to achieve clarity. Currently, Philip Morris is part of the name of our parent company as well as our two tobacco operating companies – Philip Morris U.S.A. and Philip Morris International Inc. As a result, people often refer to the wrong company when talking about “Philip Morris.” We regularly see examples of this in the media and in conversations with numerous stockholders. A new name for the parent company should help clarify our corporate identity, and make it clearer when reference is made to each of our tobacco operating companies.

· This is a good time in the company’s evolution to adopt a new name. The Nabisco acquisition and the Kraft initial public offering provide the most recent evidence of our growth and evolution. The acquisition of numerous global consumer packaged goods brands over the past decade provides an additional example of how we have changed. We are evolving culturally, too, as we work diligently on a variety of responsibility initiatives, both at the corporate level and within each of the operating companies.

· The proposed name fits our mission. Altria Group, Inc. - the new parent company name we will be proposing to you – embraces innovation, growth and new opportunities. Altria, derived from the Latin word altus, meaning high, symbolizes for us a company that is already great, but reaching ever higher. The name was chosen to reflect our aspiration to be a financially strong global family of consumer products companies that delivers peak performance, shareholder value and growth through operational excellence, consumer brand expertise and commitment to responsible business practices.”

Blah, Blah, Blah.

“The corporate practice of adopting vague, faux-Latinate names can help companies shed their image problems,” said one communications expert recently. “Philip Morris had been wounded in the tobacco wars, and had to erect a ‘fire wall’ between its cigarettes and its food and beverage products. You don’t want any carcinogenic associated with your macaroni and cheese.”

Fine, now can I have a pack of filtered Altria’s please?

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