Post-merger kerbside damage – more than your paintwork can get scratched

Some of the most monumental post-M&A disasters have happened in the car industry. One that comprehensively undermined reputation and brand value was the takeover of Bentley by Rolls-Royce in 1931 as a result of the company’s finances collapsing courtesy of the Great Depression. Where’ve we heard all this before GM and Chrysler?

Up until this point Bentley cars were positioned as the epitome of exclusive and expensive luxury cars which achieved a sporting heritage that comprehensively shaded the racing ambitions of the Germans and Italians. Following so shortly after the emergence of the company’s first production car in 1921, the Le Mans victories of 1924, and 1927-1930, notably with the legendary Speed Six, secured the Bentley name in the annals of motor sport history.

Up until its takeover by Volkswagen in 1998, Bentley’s sporting ambitions went out of the window, no doubt influenced by Depression-era cutbacks, and under the marque’s new owner Bentley cars became little more than rebadged Rolls Royce luxury saloons with a less distinctive radiator grille. Sporting heritage seemingly meant very little to the board of Rolls- Royce whose singular ambition was to build the best car in the world – and that meant a luxury saloon or limousine, not a sports car. Volkswagen had different ideas. The current model Bentley Continental GTC Speed released in 2003 and capable of 202 mph, has arguably bestowed on the Bentley brand the title of ‘maker of the world’s best high performance luxury car’. The 6.0 litre, twin-turbocharged W12 engine, producing 552 hp (412 kW) has come a long way since the legendary 84 mph Speed Sixes.

Under more visionary and more financially stable ownership, the Bentley brand has now regained the sporting ambitions it began with 80+ years ago. The purchaser of a new £153,000 Bentley Continental GTC is buying it for the perception it creates of the high speed luxury sports grand tourer. The buyer of a T1 Bentley saloon back in 1966 would have other reasons... quite possibly viewing it as a (slightly) less expensive way to fool the neighbours that you had hit the big time in the luxury saloon car stakes.

It took Bentley 72 years to regain its rightful brand status. How long will it take Chrysler’s new owner Fiat to return the brand to its former glory, to cast aside the negative perceptions that have all but destroyed its credibility in recent years and return it to the former glory days where innovation and style were paramount?

 

 

Let’s hope it won’t take until 2081.


Tony Heywood is a Fellow of the Design Institute of Australia, founder of Heywood Innovation in Australia, United Kingdom and India, and joint founder of BrandSynergy in Singapore.

New name for your merging company sir? No problem. We’ll have one in the morning for you.

... as soon as the marketing team has opened a nice bottle of red wine, rolled up their sleeves, told their partners they’re going to be an hour or two late coming home tonight, got the dictionary and thesaurus out and sent out an invitation to that brainy girl from the typing pool who did Latin at university in the UK. Names are easy to conjure up aren’t they? Especially when the bosses of the two merging companies have finished their pre-celebration lunch and suddenly realised that they haven’t got a name for the ‘new entity’ and need it the following day.

Organisations have widely differing views on the value of names. Some company leaders think their marketing team can dream one up overnight. Other global brand leaders will happily invest tens of thousands of dollars creating a name and, over several months, engaging extensive testing to ensure its uniqueness, cultural appropriateness, multi lingual potential and ability to be registered around the globe. And it’s the same when it comes to creating a new identity for the merged entity. Some leaders think it just needs a new logo to replace the two old ones. “Get one from the marketing team, and tell them I want some decent colours, and I want it tomorrow to show the Board”.

For the ‘overnight name’ brigade, reality comes home when someone points out, usually rather late in the piece, that:

> the name is rather similar to another in their industry
> the URL is not available
> the lawyer cannot register it in ‘the other country where we operate’
> the Board thinks it bears a resemblance to a certain brand of dog food
> the bright young accounting graduate from Barcelona thinks that in translation it suggests some form of genital mutilation in Spanish
> the CEO’s wife doesn’t like it
> the CEO’s teenage son came up with something better

Such things are best left up to the experts. There are time honoured procedures that must be followed. Strangely enough it does help if your have some intellectual prowess guiding the process. Fancy name generation software is usually only useful to tell you what not to recommend. Consulting with an Oxford University Latin scholar can be a good start, but names like mensarum, dominus and castrati don’t always sit comfortably. Greek anyone? As you would expect, there have been plenty of blunders over the years – see my March 27 2008 blog post.

In the case of a merger two sets of decision makers can complicate matters especially if you’re not already past the “let’s use our logo because it’s better than yours” phase in the merger discussions. Consult an external expert... you know it makes sense. Would you change your own TV aerial?


Tony Heywood is a Fellow of the Design Institute of Australia, founder of Heywood Innovation in Australia, United Kingdom and India, and joint founder of BrandSynergy in Singapore.

PS
Even couples celebrating their new addition to the family could take some advice. Years ago I remember meeting the daughter of Mr and Mrs Rainey from Texas. Struggling a little to comprehend the heavy Texas drawl, I thought she was introduced to me as Wendy. On later inspection in correspondence, I noticed her name was spelled Windy. Oh dear.