In the hectic days that led up to Bank of America's (BAC) shotgun wedding with Merrill Lynch last year, lots of mistakes were made. Not the least of those was the nondisclosure of $3.6 billion paid in bonuses to Merrill executives prior to the $29 billion deal's closing, which has led to both federal and state investigations.
Another bone-headed decision on the part of Bank of America's management was to kill off Merrill's iconic bull logo, an image so associated with optimism and prosperity on Wall Street that a 7,000 pound bronze sculpture of a charging bull graces a nearby park in Manhattan and has become a popular tourist attraction in its own right.
Now, Bank of America will spend as much as $20 million to bring the bull back along with the Merrill Lynch name. The old Merrill will now be christened Merrill Lynch Wealth Management, and become one of two primary units within Bank of America's Global Wealth and Investment Management division. (The Merrill purchase made Bank of America the largest wealth manager in the country.)
The then-stricken Merrill Lynch may have been a ripe takeover target, but to ignore the value of the bull logo and hastily dispose of it was a move likely driven by egos, said Paul Kurnit, professor of marketing at Pace University in New York and co-author of When The Going Gets Tough, Tough Businesses Get Growing.
"It will probably cost them a whole lot more to do that relaunch than if they would have had the insight and the wherewithal at the point of that acquisition to understand the equities and the assets they were acquiring," Kurnit said.
Management at the bank, which includes soon-to-depart CEO Ken Lewis, is supposedly some of the best in America, and should have been able to make smart decisions quickly, he said.
The fact that Bank of America, which received some $45 billion in taxpayer bailouts, will spend $20 million to relaunch the Merrill name and logo may not sit well with some people, but Kurnit believes the amount isn't all that extraordinary. "It's just not a huge sum of money in the advertising arena to what is basically a reintroduction of a brand," he said.
Bank of America's announcement isn't unlike the one made by Ford Motor Co. (F) in 2006 to bring the Taurus (which, by the way, is Latin for "bull") nameplate back into its fold of passenger car brands.
Long before CEO Alan Mulally was hired in September 2006, the Dearborn, Mich.-based automaker had decided to stop making what once was the most popular car in the U.S., a decision that perplexed Mulally. "How can it go away?" he remembered asking. "It's the best-selling car in America."
As was the case with the Taurus, the Merill brand and bull icon have built-in recognition, Kurnit said, "Whether $20 million is enough to really burnish the brand in terms of the relaunch for wealth management remains to be seen."
BofA's decision to spend $20M on Merrill relaunch a bullish idea