The Cootes brand name should scoot away
Two people were killed and five injured when a Cootes fuel tanker lost control on a bend in the Sydney suburb of Mona Vale and burst into flames on October 1 last year. What that tragic accident did was make apparent the safety and operational protocols at play within the Cootes transport business. It put them in the spotlight and NSW and Victorian transport authorities have issued Cootes with hundreds of defect notices since then.
As a business and a brand they are in a tailspin. They have lost a number of large contracts with Shell and BP. Their contract with Caltex Australia is up for review early next year. Cootes is owned by the McAleese Group, which bought Cootes from private equity group CHAMP in 2012. It is another great reminder that one never purchases a ‘bargain’ when the seller is a private equity group, and certainly it would appear that McAleese has simply acquired a corporate head ache.
Mark Rowsthorn, Chairman of the McAleese Group said recently to the media that the repercussions from the Mona Vale accident, including the scrutiny of its fleet, had caused reputational damage that it had not had an opportunity to defend. However, given the circumstances, any form of defense will require the business to outline what it is now doing differently in the way that it is managing its fleet and drivers. It has to defend its reputation through its deeds, not its words.
It has also been reported that the Cootes trucking brand may be scrapped, almost 50 years after it was founded. Consideration is evidently being given to renaming its fuel distribution business McAleese Oil & Gas. On the surface a rebrand makes infinite sense, so long as the unsatisfactory practices that have landed the Cootes brand into its current predicament are changed. From a name change perspective what has to be considered is what brand equity they are walking away from. In the case of Cootes it has clear reputational damage, any brand equity is seriously eroded, hence the opportunity cost of changing relatively low. Add to this the fact it is in a B2B market which allows any brand name change to be directly communicated to your core customers, means it is easier to build immediate awareness of the new brand.
However, if the Cootes brand is dumped, and the McAleese Oil & Gas brand adopted, there needs to be a compelling story line that reflects that it is not a cynical exercise in smoke and mirrors, but rather an important symbolic gesture to internal and external stakeholders that the culture has changed. But the story line does have to demonstrate real change. If McAleese actually began to crusade for a safer and more sustainable transport sector, then it may well derive some upside, as may the public who share the road space.
Caltex Australia chief executive Julian Segal has been reported as saying the group would consider renewing Cootes’ contract, “…if Cootes would be in a position to reassure us of the reliability and safety of the trucks then they would be considered,” he said. Name change, or no name change, something has to change.