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News September 9, 2010

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Local gas station owners bolt from BP as others call for rebranding

BP gas station owners across the country are divided over whether the oil giant stained by its handling of the Gulf spill should rebrand U.S. outlets as Amoco or another name as part of its effort to repair the company's badly damaged reputation.

However, some local oil companies have already decided to sever ties with BP because they are disappointed with the oil giant's business practices. Fred Newman, owner of Newman Oil Co. in Columbus, said he noticed a lack of ethics even before the spill.

At one time, Newman owned as many as seven BP stations in the Golden Triangle before his contract was canceled last October. The cancelation came just a few weeks before BP pulled out of its distribution terminal in Meridan, which would have given Newman a $2,500 payout per location and the option to rebrand his stores at no cost. However, since his contract was not renewed, the company told him it didn't owe him anything.

Newman continued managing some of the stations on a subcontractual basis until the recent fiasco at the Deepwater Horizon rig led him to distance himself completely.

"I've taken it personally, too, because I go down to the Gulf Shores and do deep-sea fishing a few times a year," Newman said. "I'm just sick of them."

And BP's response to the leak has done nothing to redeem them in his eyes.

"As big a company as they are, they should have had assets coming from all over the world within 24 hours," Newman said. "What I'm especially worried about is the chemical dispersants. People don't realize that all that does is get the oil down beneath the surface. Out of sight, out of mind."

As for the possibility of BP rebranding itself, Newman said the company should try to salvage its tarnished reputation rather than change its name.

"They're not going to fool anybody by doing that," he said. "They're a stickler for the little things, but the big things they sweep under the rug. That's just the way they do things."

Newman said he has chosen instead to supply his some of his stations with PURE Oil, which was formerly the Southeastern Oil Jobbers Cooperative. He said that other local companies such as Dutch Oil, which used to own more BP stations than he did, have decided to do the same and change their affiliations rather than wait for BP to rebrand on its own.

Duch Oil officials were unavailable for comment this morning.

Some who have seen their sales plunge because of protests say BP has already sought a fresh start by naming an American to replace its gaffe-prone British CEO, so why not change the name on gas stations marquees as a further symbol of that culture shift.

Others worry that a name change is a big deal that is risky given all the marketing dollars already spent building up the BP brand. They also believe a successful turnaround with the existing brand will have a bigger payoff.

In the aftermath of the oil spill, some BP-branded gas stations reported sales declines of 10 percent to 40 percent from Florida to Illinois. BP later responded by offering distributors of BP gasoline cash in their pockets, reductions in credit card fees and help with more national advertising.

The BP name and green-and-yellow sunflower logo took over after BP merged with Amoco in the late 1990s, replacing the Amoco name and its blue-and-red torch inside an oval logo.

There is precedent for such a drastic move to return to the Amoco name or to go with a new name. Think AirTran after the ValuJet crash and Xe Services after the killing of civilians by Blackwater Worldwide guards in Iraq.

John Kleine, who heads a trade group that represents distributors of BP gasoline in the U.S., told The Associated Press that interest in changing names has not reached a fever pitch by any means, but it has supporters and is percolating among station owners ahead of their annual convention with BP executives in October.

"Is it on the minds of people? Sure," Kleine said. "It would not be a topic of conversation if not for the oil spill."

Kleine noted that many distributors would still like BP to try to rebuild its existing brand, and if that cannot be done, then to consider alternatives.

Distributors in many cases also own and operate stations.

Two BP officials said in e-mails that the company is not considering rebranding U.S. gas stations.

BP owns just a fraction of the more than 11,000 stations across the U.S. that sell its fuel mostly under the BP banner. ARCO, a BP affiliate, is predominant in the West. Kleine said the Amoco name is no longer supposed to be used, but acknowledged in rare cases it may still exist in a few locations. Most BP-branded stations are owned by local people whose primary connection to the oil company is the logo and a contract to buy gasoline.

Bob Juckniess, who owns 10 BP-branded stations in the Chicago area, is in the camp that wants BP to consider rebranding to Amoco at U.S. outlets.

"The BP brand is very tarnished right now, not just the brand but the reputation as a company is tarnished," said Juckniess. He added, "Amoco was very well known and had a great reputation as a name and a brand."

Juckniess said he feels so strongly about the issue that he would "urge BP to look at the ramifications of such a change."

It is noteworthy that Bob Dudley, the American who will replace Tony Hayward as CEO on Oct. 1, worked for 20 years at Amoco Corp.

On the other side of the debate is Jeff Miller, whose company owns, operates and supplies roughly 56 BP-branded stations primarily in southeastern Virginia.

He said that if BP does the job right and invests back in its brand and customer base, it stands to gain more by not changing the name at U.S. stations.

"When you look at all the case histories of all that have done it well, whether it is Toyota, Tylenol or Exxon, they have all reinvested in their brand and done a better job," Miller said. "If you just change the name and don't change the behavior, have you really gained anything?"

Miller said he has heard from a number of station owners who have suggested BP rebrand U.S. stations as Amoco, but he describes that as a "knee-jerk reaction.""I think you get a better return by working on repairing your reputation than starting fresh," he said.

Jim Donnini, whose company owns, operates and supplies roughly 75 gas stations in Florida that fly under brands including Chevron, Exxon, Shell, Sunoco and Valero, said Amoco was a very strong brand in Florida.

"Everybody thought they missed their opportunity to keep it that way," Donnini said of BP, referring to the aftermath of the Amoco merger.

Donnini, who doesn't own any BP stations, said he has heard from owners of BP-branded stations in Florida who would like BP to consider a name change at U.S. stations.

"It's really a shame the independent businessmen that fly that BP flag are being victimized," Donnini said.

Dispatch Staff Writer Seth Putnam contributed to this story.

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Article Comment roscoe p. coltrain comments:

7/31/2010 5:23:00 AM

Don't know why you'd run off now. You voted the people into office that allowed this situation to happen, so live with it.

Don't know what I'm talking about??? Look it up.

Article Comment msudad comments:

7/31/2010 1:54:00 PM

I refuse to buy from BP at any of their gas stations....a one man protest to what they done to our gulf coast.

Article Comment lookout_its_chuck_norris comments:

7/31/2010 2:34:00 PM

Not purchasing gas from BP isn't doing anything but hurting the business owners who are members of this community. Not BP.

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