The Slow Death of a Great Brand

One of the first things I learned as a graduate student at Northwestern’s Integrated Marketing Communications (IMC) program 20 years ago and years later as a teacher in that same program was the value of a brand. Managing a brand is so important people earning college degrees focused entirely on how to protect this important asset. A brand like McDonald’s is much more than its golden arches however, as Apple’s is more than its intriguing white fruit logo.

While a brand is really an intangible, its value to any successful company is immense. In the most simple of terms, a brand is really all about a company’s reputation in the marketplace. How reliable are its products? How clever are employees at developing fresh solutions to old problems? Just as important is the faith a corporation’s name conjures in the minds of consumers ready to hand over their money. Would iPod’s have become household words if Apple had turned their back on customers when a unit failed? Not a chance. A brand then is everything a company does that makes consumers return for more … the employees, the products, the service. Screw any of these up and the brand’s in peril.

Case in Point

Hawker Beechcraft’s troubles aren’t new since the 90-year old aircraft builder’s been wallowing in Chapter 11 bankruptcy since May. No surprise that investors Goldman Sachs and Onex wanted out after struggling with HBC’s $2.5 billion debt, but when the Chinese deal with Superior Aviation fell apart a few weeks ago, on the eve of the industry’s biggest show at NBAA in Orlando, Hawker was trapped between a rock and a hard spot.

Reinventing Hawker seemed like a no-brainer to management, even though that meant dumping the Hawker jet line, including the HS-125 series, an SUV of an old airplane. At NBAA, Hawker announced a corporate turnabout that calls for the company to focus on single-engine aircraft – including a yet-to-be green-lighted single-engine turboprop – as well as the tough old King Air line. With no new Hawker jets rolling off the lines in Wichita since last spring, the new Hawker 4000 and the Premiers are also DOA.

The jets? Well, stuff happens. But a single-engine turboprop? An interesting idea unless you believe the announcement might have been to take everyone’s eye off what else was happening at Hawker.

Not long after last spring’s bankruptcy announcement came the story of a number of Hawker’s top brass maneuvering for over $5 million in bonuses as rank and file Hawker employees lost their jobs. In August however, an outraged bankruptcy judge said no to the effort. Then a few weeks ago came a stern scolding from a U.S. bankruptcy trustee that way too much of the $12 million Hawker spent in bankruptcy court legal fees was aimed at figuring out a way to land those darned executive bonuses … the same fat paychecks that judge told executives to drop in August. Guess they didn’t get the memo.

The final nail in the Hawker coffin though was the NBAA announcement that bankrupt Hawker Beechcraft was dumping its warranty responsibility on the Premier 1a and the Hawker 4000 jets. Hawker asked for, “permission to cancel certain warranties and factory-sponsored programs, including our guaranteed maintenance program SupportPlus and the Hawker 4000 upgrade and enhancement program.” If the court approves the move, HBC will continue the warranties on a few Hawker jets — the 750, and the 400 XP and 900XP.

But the damage is already done, even if the court refuses the petition.

A company with managers who care more about themselves than about their employees or their customers is already dying on the inside. Single-engine turboprop? That’s a smoke and mirrors project. Would you trust this once great company any longer? It’s no wonder they couldn’t sell it.

Beech Aircraft and its employees built some of the best airplanes in the world, thousands of which are still flying. I’m proud to have “HS125” stamped on my ATP certificate. Now this company’s management has become an industry embarrassment. Inside one of my old Beechcraft sales training manuals from the late 1970s, I found this quote … “Beech Aircraft Corp., a tradition of excellence.” That really is history isn’t it.

Rob Mark, Publisher