The 90s

In the late 90s, Cadillac’s newest model – the Catera – was being criticized left and right for not living up to standards consumers (and the automotive press) expected from Cadillac. It wasn’t enough that the Catera didn’t meet sales targets; reliability, quality, and other issues were also plaguing the rebadged Opel sedan. GM knew that something needed to be done to repair Cadillac’s sullied image. And, as if things weren’t bad enough, the brand’s market share was on the decline and its customer base was getting older: the average age of a Cadillac buyer in 2000 was 67 years old.

1997 Cadillac Catera was a rebadged Opel Omega

The Meeting That Started It All

In late late 2000/early 2001, GM executives held an informal meeting to discuss Cadillac’s future. The brand’s image, products, dealers, and service experiences were all on the table. In less than two months after the initial meeting, managers realized that what Caddy needed most was a fresh start: a fresh image, a revised product portfolio, and a younger customer. In less than six months after that, senior managers agreed on a strategy. It’s this grand plan that became known as Art & Science – and it cost GM $4.3 billion.

Art & Science

The investment paid for new, more powerful engines, a new flexible rear-wheel drive platform (Sigma) that delivered sportier handling, the edgy design that’s prevalent on every Cadillac today (except for the Escalade), and a marketing budget.

The 2003 CTS was the first Cadillac to employ the Art & Science philosophy

The first Cadillac that delivered the Art & Science theme was the 2003 Cadillac CTS. It was built on an all-new platform (Sigma) and took Cadillac in an entirely new direction. From there came the STS sedan and first-generation SRX crossover, which were also based on the new Sigma platform and transformed Cadillac from that floaty-boaty vehicle your grandpa drives to a luxury brand that could jockey with the best from Germany and Japan.

Cadillac XLR-V

And we wouldn’t do the Art & Science program justice without at least mentioning the audacious XLR hardtop convertible that was as awesome to drive as it was to look at as well as Caddy’s performance models that wear the V badge, including the CTS, STS, and XLR.

The 2004 SRX was the first-ever Cadillac crossover

Today

Fast forward nearly ten years and Cadillac – to this day – is still undergoing a noteworthy renaissance. The brand just launched the CTS Coupe, arguably the most attractive Cadillac ever made, and has seen enormous demand for the all-new Theta-based SRX. At least four game-changing models are coming over the next five years, including a compact sedan (ATS) to take on the BMW 3 series, the next-generation CTS that will go head-to-head against the 5 series, a Lambda-based Escalade, as well as a flagship sedan. Whether the latter will be the Super Epsilon-based XTS or a model based on a premium version of GM’s Zeta platform is still up in the air.

The 2011 CTS-V Coupe is the newest addition to the Cadillac lineup

But Caddy is also trimming down: it will phase out two vehicles, including the the DTS and STS sedans, at the end of 2010. The discontinuation of the DTS, in particular, may upset owners of the antiquarian sedan who have come to appreciate the couch-on-wheels personality of that vehicle. However, it appears that Cadillac is positioning itself to compete directly with the sport-luxury marques from Germany, including BMW, Mercedes-Benz, and Audi. And the new model range should assist Cadillac’s nearly non-existent presence in Europe.

The RWD Sigma-based STS will be discontinued within the year

What’s more, GM’s vice president of global vehicle engineering, Karl Stracke, vowed to make Cadillac vehicles lighter than those of BMW in unsprung mass. Seeing that BMW is often the most popular luxury brand in the United States (it swaps with Lexus for the number one spot every few months), the strategy seems solid and will surely pay off. Perhaps the “soft luxury” segment is best left for Buick, but that’s a different box of bolts (you can listen to our conversation on the GM Authority Debate podcast about Buick and Cadillac brands here).

Do you think GM’s $4.3 billion investment in Art & Science at the turn of the century was worth it? Are you satisfied with the vehicles (and results) it has produced? Talk to us in the comments below.

The DTS, which uses GM's old K platform, will be discontinued this year when full-scale production of the Chevrolet Volt begins at the Detroit-Hamtramck Assembly Plant

VTTI Smart Road

General Motors has awarded $5 million to Virginia Tech to create the National Tire Research Center at the university’s Transportation Institute (VTTI). The new facility will provide automobile and tire manufacturers a place to develop new tire technologies, reproduce emergency events, and improve vehicle highway safety.

“This facility will be the only one of its kind in the world and will generate world-class tire research data while generating significant revenue and high tech jobs in Southside Virginia,” said Tom Dingus, VTTI director and principal investigator for the tire center proposal.

General Motors hopes that the investment will lead to new tire technologies that result in increased fuel economy and lower emissions. The research center, which is an outcome of a long-standing partnership between VTTI and GM, will cost a total of $14 million, with the remaining $9 million coming from Virginia Tech and the national tobacco settlement.

“As a founding member of the National Tire Research Center, General Motors looks forward to partnering with Virginia Tech and the Commonwealth of Virginia to pioneer research and development that will develop ‘green’ tire technologies to further improve the fuel efficiency of vehicles in the future,” said Karl Stracke, GM vice president of Global Vehicle Engineering said,

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The plant will build camshafts for the next-gen ECOTEC engines, GM’s highest volume and most advanced four-cylinder powerplant that propels The General’s most popular vehicles, including the Chevy Malibu and Equinox, Buick LaCrosse and Regal, as well as the GMC Terrain.

According to GM manufacturing manager Gerald Johnson, this particular investment will result in the creation of 15 new jobs at the plant, while the total employment effect from GM’s three investments will result in 113 new hires at Bay City.

The GM Authority Take

GM’s current lineup of ECOTEC engines is rather impressive, ranging in displacement from teensy 1.4 liter motors that produce less than 100 horses  all the way to the turbocharged 2.8 liter turbo ECOTEC good for 320 hp found in the Opel Insignia OPC.

But with the demise of the Pontiac Solstice GXP and Saturn Sky Redline, the North American market is devoid of these high-performance ECOTECs (LNF series). Let’s hope the next-gen ECOTEC mills will be available in their high-performance (boosted) guises in the States and beyond.

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Breaking down the numbers, we see that the General earned a healthy $2 billion in earnings before interest and taxes (EBIT) with GM North America bringing home $1.6 billion of the purse. GM Global punched in $.7 billion, but GM Europe still suffered a net loss of $.2 billion – which is still an improvement from the $.3 billion loss last quarter.

Vehicles to thank for the company’s recent success include crossovers such as the Chevy Equinox, GMC Terrain and Cadillac SRX, as well as the very successful Buick LaCrosse. Globally, the Chevy Cruze has been pulling through for The General and will most likely add to the success when it is finally launched here in the States in the third quarter. GM’s popularity in China has also played a key role in The General’s second quarter success.

This good news also builds up for a successful IPO, which has been rumored to be filed as soon as tomorrow… or maybe not.

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According to reports, the GM board of directors has approved initial design work for the flagship Buick sedan, which provides limited resourced for the program to move forward. This, however, does not mean that the vehicle has been approved for production.

Caddy On Board As Well?

Less than two months ago, we reported that GM is looking into a true RWD flagship for the Cadillac brand. Coincidentally, this uber-Caddy will also be based on a premium version of the Australian-sourced Zeta platform. Most recently, the project has been making headway, having received more funding since its inception in June.

Apparently, the strategy is for the Zeta-based Cadillac to compete with such vehicles as the BMW 7 series and Mercedes Benz S-Class while the Buick flagship will take on the venerable Lexus LS. This strategy is very much akin to what we at GM Authority have been yearning for over the last year (more on that in the Take below). At this point, we don’t know how the approved-for-production XTS will fare going forward.

Park Avenue?

Of note is the Buick Park Avenue (pictured above) – Buick’s current flagship offering in China. The Zeta-based sedan – essentially a rebadged Holden Statesman (soon to be known in the U.S. as the Chevrolet Caprice Police Patrol Vehicle) – was recently refreshed. As of this writing, the roadmap for the Chinese-market Park Avenue is unknown, but it is entirely possible that it be replaced with the Zeta Premium-based sedan.

Back seat luxury in the Chinese-market Zeta-based Buick Park Avenue

People Shortage

While certain reports cite GM’s financial constraints as barriers to further (faster) development of these products, we have it on good record that this is not the case. In fact, GM is facing a human resource00s shortage to accommodate new projects. In particular, GM doesn’t seem to have enough engineers on hand to work on the aforementioned Zeta projects, among others.

Cockpit of the Chinese-market 2010 Buick Park Avenue

Manufacturing

What’s more, GM will need to decide what facility it will use to manufacture the Zeta-based sedans. Currently, the only Zeta-based vehicle available in North America – the Chevy Camaro – is manufactured at GM’s Oshawa, Ontario, Canada facilities, making the plant a perfect candidate for the new vehicles. However, GM’s Lansing Grand River assembly – which manufactures GM’s Sigma-based vehicles – is also a possibility.

Timing

The timing of these products will largely depend on their approval and development schedules. Whether these sedans will be approved after or before GM’s ever-looming IPO is unknown, although they could be a proverbial feather in GM’s hat in front of potential investors if The General releases more details (or even concepts) about the vehicles.

The GM Authority Take

Well, this is exactly what the GM Authority crew has been clamoring for. In fact, it appears as if the fine folks at GM have been listening to us and are taking our suggestions seriously. (Listen to this episode of our debate podcast for further information). What, exactly, are we talking about? In short, we see a unique opportunity for General Motors to absolutely and positively dominate (not compete in, but outright own) the luxury market by properly aligning Cadillac and Buick.

Here’s a brief synopsis of our perfect-world scenario: Cadillac becomes the performance-luxury brand that competes head-on with BMW, Mercedes-Benz, and Audi, while Buick takes on Lexus, the luxury sales leader in the U.S.

Keeping this in mind, full-size flagship sedans based on a premium version of GM’s rear-wheel drive Zeta platform fit the bill, as long as the Cadillac variant is tuned for performance and athleticism while the Buick version focuses on a silky-smooth ride, refinement, and sound dampening/isolation.

But while these sedans – if approved for production – would be a start to what we feel is an otherwise perfect plan to command the luxury market all over the world, both Caddy and Buick would require better product planning and brand positioning for the rest of the Buick and Cadillac lines. For example, Buick would need to focus on creating a midsize luxury sedan that would be more competitive with the ES, Lexus’ best-selling sedan.

While Buick’s LaCrosse is a great effort, we feel it’s too large to effectively compete with the ES (7 inches longer). The new Regal is a dead ringer for the ES in size, but its increased emphasis on performance and tight handling is a polar opposite to the buttery-smooth feel of the ES.

As for Cadillac, we feel that the SRX – while a fine vehicle and a great seller – would need to transition to a rear-wheel drive (perhaps Sigma?) architecture to truly deliver on the promise of Cadillac as a performance-luxury brand.

What’s more we’re not completely sold that the Zeta platform will underpin the flagship sedans, since we’ve been hearing rumblings about a super Sigma architecture to serve just this purpose.

We’ll keep our ears to the ground on this one… but if these products materialize, they will be enormous steps in the right directions for Buick and Cadillac, respectively.

Gallery: 2010 Buick Park Avenue

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Jaime Ardila, Vice President of GM Brazil, said that General Motors’ “strategy is to focus investment on technology, new products and upgrading our plants. We need to keep up with the pace of growth of the Brazilian vehicle market by boosting our share while maintaining a strong financial performance.”

Last year, The General recorded its best year ever in Brazil, selling 595,536 vehicles. This makes Brazil the third largest operation worldwide for GM behind the United States and China. As of 2010, GM has been operating in Brazil for 85 years.

Chevrolet has the largest automotive portfolio in Brazil, whre it sells 18 models and employs 21,062 people. These employees are spread across two states (São Paulo and Rio Grande do Sul) and three other locations in Mogi das Cruzes, Sorocaba, and Indaiatuba.

Click past the break for GM’s presser.

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When GM went into bankruptcy, the Canadian government swapped $8 billion in exchange for a 12 percent stake in GM – a small amount compared to the stake held by the United States. The U.S. converted $43 billion (of the total $50 billion investment in GM) into a 61 percent ownership. Kevin Williams, president and managing director of GM Canada, had the following to say in a statement:

“Thanks to the support we received, we’ve transformed our business and have a strong foundation for success going forward.”

St. Catharines will start building the six speed automatic transmissions in 2012. Once built, the transmissions will be sent to either the Oshawa Car Assembly, where the Chevrolet Camaro is presently built and the new Buick Regal will be built, or the CAMI Assembly plant in Ingersoll that builds the Chevrolet Equinox and GMC Terrain. GM hopes the investment will clear up a bottleneck of back orders and get its vehicles to dealers and into customer hands sooner.

[Source: Detroit News]

Fairfax, Kansas

The Fairfax, Kansas plant is getting an infusion of $136 million and will become the primary manufacturing facility of the next-gen Malibu. The plant currently builds two of GM’s strongest-selling cars – the Chevy Malibu and the Buick LaCrosse. As of this moment, Malibu production is split between Fairfax and Lake Orion, Michigan.

Detroit Hamtramck, Michigan

The Hamtramck, Michigan plant, which currently builds the Buick Lucerne and Cadillac DTS, is on the receiving end of the remaining $121 million and will be equipped to build the future Malibu. The plant will be used to build the much-anticipated Chevrolet Volt and has recently reached a major milestone in building the first pre-production Volt on March 31.

Keep reading after the jump!

Meeting High Demand

GM’s ability to produce the Malibu at the facility will ensure that Chevrolet can meet market demand for the mid size sedan, which GM is predicting to be extremely high given the backup plan.

The $257 million investment in Fairfax and Detroit Hamtramck includes upgrades to the facilities, machinery and equipment, as well as tools. The infusions are part of GM’s $1.5 billion commitment to upgrading production facilities and restoring 7,500 jobs in the last nine months.

What’s more, GM’s dealers in the United States have delivered more than 49,000 Malibus and 14,000 LaCrosses in the first three months of this year, representing a 58 percent increase over the same time period last year. The strong demand has prompted GM to add a third shift of approximately 1,050 jobs at the Fairfax plant, a move that brings total employment at the facility to more than 3,800. Whoever says GM is moving jobs overseas definitely has his (or her) head under a huge rock boulder.

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It’s a known fact of life that U.S. pickup truck sales are directly related with the housing market: as the amount of homes being built increases, so does the sale of trucks. And though many view the struggling truck and SUV market as a sign of the times, many optimists like myself feel that not only will there always exists a market for such a vehicle in this country, but that the market will in fact someday improve. Apparently, GM Chairman and CEO Ed Whitacre felt the same way when he gave the project his “thumbs-up.”

If you recall, both the Sierra and the Silverado were both completely redesigned for the 2006 model year, but Ford and Dodge were quick to counter with some updates of their own. As such, GM believes that a model redesign is necessary to remain competitive in the ever-weary yet ever-competitive truck and SUV market.

Not only does GM need to keep an eye on their domestic counterparts, but the import market as well. Toyota’s Tundra has posed a real threat to the domestics, but recent sales numbers have taken a beating.

Though we aren’t really sure when the economy is going to turn around, it sure is nice to know The General has a promising future ahead for what I consider to be this country’s “bread and butter” – the pickup truck!

Check out our high-res galleries of the 2010 GMC Sierra, Sierra HD, and Chevy Silverado after the jump!

2010 Chevrolet Silverado

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2010 GMC Sierra

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2010 GMC Sierra HD

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