Can Honeywell skirt extinction?

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Can the venerable Honeywell brand escape the executioner's ax one more time?

That's the key branding question surrounding General Electric Co.'s $45 billion acquisition of Honeywell, which was announced Oct. 22. If the deal receives regulatory approval, "GE will use the 'GE-Honeywell' brand name in some key product lines," according to the press release announcing the deal.

However, observers say that GE rarely maintains the brand names of acquired companies, with NBC being a notable exception.

"In the short term, they'll keep it just to make the Honeywell people more comfortable with the merger," said Al Ries, chairman of branding consultancy Ries & Ries Inc. "Once Honeywell is fully integrated into GE, they'll drop the Honeywell name. In general, [GE is] committed to the single brand."

GE officials did not return phone calls seeking comment.

The Honeywell brand has shown remarkable resiliency. AlliedSignal acquired Honeywell last year, but in an unusual move, the merged company decided to keep the Honeywell name.

"It was clear that the Honeywell brand name had a much longer history and a much broader global awareness, probably a century's worth, versus AlliedSignal, which had 10 years of awareness," said Tom Crane, Honeywell's director of corporate relations. "While AlliedSignal had great brand equity on Wall Street, when you come to reaching customers, with the Honeywell brand there wasn't much of a comparison."

Corporate Branding L.L.C., a branding consultancy, participated in the discussions between AlliedSignal CEO Lawrence Bossidy and Honeywell CEO Michael Bonsignore about what to call their new business.

"Even though the dominant player was AlliedSignal, they chose wisely to go with the stronger brand," said James Gregory, Corporate Branding's CEO.

Gregory's firm conducts an extensive b-to-b brand survey every year, interviewing 8,000 executives about 800 companies in 34 industries. The survey results clearly showed Honeywell's superior brand power, Gregory said.

Honeywell was familiar to more respondents, scoring a 63 on a 100-point scale, versus AlliedSignal's 43. GE scored an 88 to Honeywell's 63. In terms of favorability, GE outperformed Honeywell 76 to 64.

Another brand consultancy, Interbrand, ranked the world's most valuable brands in 2000; GE placed sixth, trailing only Coca-Cola, Microsoft-Windows, IBM, Intel and Nokia. Honeywell didn't rank in the top 75. In branding consultancy Landor Associates' Technology ImagePower 2000 study, which queried Internet users about brand attributes, GE ranked 20th, while Honeywell placed 93rd.

The GE-Honeywell name may endure because of Honeywell's presence in certain key verticals. Indeed, GE does use similar brand construction in limited areas. For instance, it uses GE-Cisco and GE-Fanuc, but both of those names describe joint ventures.

Perhaps the fate of the Honeywell brand can be surmised from a comment by GE Chairman Jack Welch during the press conference announcing the acquisition. "This is the most exciting deal for GE since RCA," he said. Note that the once-mighty brand of Radio Corporation of America, the former parent of NBC, has long since disappeared into GE.

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