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Regional Report Eastern April 2009


As brand, Blackwater picks one that’s bland

In February when Moyock-based Blackwater Worldwide became Xe Services LLC, the question wasn’t what’s in a name. Branding experts say it was a matter of what wasn’t — a bad image. “They had what I’d call a brand crisis, and when a brand becomes so blemished, the only decision a company can make to keep in a growth mode is to rebrand,” says Clayton Tolley, president of Charlotte-based Addison Whitney LLC, which created such names as Escalade for Cadillac’s sport-utility vehicle.

Another Charlotte brand strategist agrees. “I’d say they wanted to come to market with a blank slate and build a new reputation around it,” says Jim Gregory Cusson, a partner in Birdsong Gregory LLC, whose clients include Food Lion. ”The name might be more palatable in foreign markets where I’m fairly sure nobody has a preconceived notion about it.”

Blackwater — northeastern North Carolina’s largest employer (cover story, June 2007), with more than 450 workers — has suffered a public-relations battering, particularly for its actions in Iraq. In September 2007, Blackwater security contractors guarding U.S. diplomatic personnel killed 17 civilians. Six face manslaughter trials, and its contracts — it had more than $1 billion in government awards since 2004 — were not renewed.

Xe spokeswoman Anne Tyrrell says the name was chosen because Blackwater is shifting emphasis from high-risk security details to logistics and training law-enforcement officers. The site of most of that training — Blackwater Lodge & Training Center in Currituck County — has become U.S. Training Center Inc. As part of the shake-up, CEO Erik Prince, 39, resigned as chief executive but will remain chairman. A new CEO hasn’t been chosen. President Gary Jackson, 52, retired. His replacement, Joseph Yorio, was a vice president of DHL delivery service.

As for the name, Tyrrell says, “Xe — pronounced like the letter ‘Z’ — was one of several considerations.” She says Xe is a nonword, chosen for its sound and look. Branders have a name for such choices: neologisms. Addison’s creations include ImaginOn, for a children’s library in Charlotte. Blackwater is following a beaten path for companies with jaundiced images. For example, ValuJet renamed itself AirTran after a 1996 crash in the Florida Everglades that killed 110. “You get rid of the negative association,” Tolley says.

As Blackwater, the company spent more than a dozen years establishing the brand worldwide. Now the name as well as the company’s logo — a bear paw overlaid with target-scope cross hairs — are gone. “Companies that lose are those that have spent five or 10 years and millions of dollars invested in promoting the brand,” Tolley says. ”They lose not only the bad image, but the good equity as well.”

What does Xe convey to an outside expert? “Absolutely nothing,” Cusson says. Tolley is kinder. “It’s short, memorable, the last word in the alphabet — it connotes power.”

PLYMOUTH — Montreal-based Domtar cut 185 jobs at its paper plant here, leaving it with about 500. The layoffs were blamed on lower demand for envelopes and fine paper.

FAYETTEVILLEDelta Apparel will eliminate 107 jobs when it closes the textile-manufacturing division of its M.J. Soffe unit by June. Greenville, S.C.-based Delta is consolidating textile manufacturing. About 550 jobs will remain in sewing, screen printing and other departments.

ELIZABETH CITY — Greenville-based University Health Systems of Eastern Carolina will begin managing Albemarle Hospital May 1. Its annual fee starts at $500,000 and goes up 4.5% a year. But it could drop to $300,000 if UHS doesn’t meet cost-saving goals.

WILMINGTON — New York-based Corning cut an unspecified number of salaried workers. The factory, which let go about 100 hourly jobs in December, employs about 900.

GREENVILLE — Citing declining advertising revenue, Atlanta-based Cox Newspapers eliminated 28 jobs at two newspapers in North Carolina. The Daily Reflector cut 23 of its 232 positions. The Rocky Mount Telegram trimmed five of 49.

KINSTONLenoir Memorial Hospital indefinitely postponed a $14 million critical-care unit because of the poor economy. Construction was to begin this summer.

WILMINGTON — Frederick Willets III, 59, retired as CEO and president of Cooperative Bancshares. He remains chairman. Chief Financial Officer Todd Sammons, 47, became interim CEO and president. The bank also delayed fourth-quarter and yearly earnings reports to study its loan portfolio and losses.

WILMINGTONPharmaceutical Product Development agreed to buy European contract-research organization AbCRO. Terms of the deal, which was scheduled to close by this month, were not disclosed. The acquisition will allow the drug researcher to enter Romania, Bulgaria, Serbia and Croatia and bolster operations in Poland, Russia and Ukraine.

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