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Cadillac President Johan de Nysschen Marks One Year Anniversary With Plenty Of Work Left To Do

Cadillac President Johan de Nysschen celebrated his one-year anniversary with Cadillac and, his message still rings relevant to this day: slow and steady.

There have been ups, and downs, surrounding the brand one year since de Nysschen took the reins, but he is adamant on his long-term strategy to position the brand as a luxury all star.

“Right now we have to put image development ahead of sales development,” de Nysschen said in an interview last month, from Automotive News.

“Unless you take time to work on those building blocks, you are forever in this circular reasoning: You have great cars, but they don’t gain traction.”

Those words come after a barrage of bad baggage following Cadillac’s move to New York City, and sales of his brand staying stagnant over the past 10 of 12 months he’s been in charge. But, sales volume doesn’t occur overnight. Especially without the right message.

In his defense, there have been a few bright spots with de Nysschen’s Cadillac. Transaction prices of Cadillac vehicles have surged, with the 2015 CTS commanding higher prices than a comparative BMW 5-Series, though, the 2015 Escalade has led the charge, with an average $86,000 price tag. Incentives spending has plummeted, too, which makes for strong resale values, an important factor for any luxury product.

But, for some dealers, the clock is ticking. The minimal growth has hurt standalone Cadillac dealers as they pass time and wait for de Nysschen’s vision to become a reality. Add in the news of a product hiatus following the 2016 Cadillac XT5, and it doesn’t help paint the brightest picture.

But, de Nysschen has an impressive track record with brand building. Take one look at Audi today, and you can see his fingerprints all over its rise to luxury prominence.

Former GM Authority staff writer.

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Comments

  1. A few things here. First off are we going to see Cadillac listed like Opal and Holden where it’s a wholey owned subsidiary of GM instead of a division? I can’t see this guys vision of full fredom of GM when the cars are going to be made in GM plants with GM parts and not to mention every car going forword is part of GMs 12 billion dollar investment.

    While he dose have some good ideas for Cadillac, it seems like he is trying to mold Cadillac into his own company like he did at Infiniti. And we see how that all played out. I have to believe that GMs Board is getting a bit nervous with this guy at the helm. Not to mention how long can the dealer network survive with this sorta poor sales performance that seems to be getting worse every month.

    But I have to keep coming back to him wanting make Cadillac look like a standalone company. It would take about 2 generations to accomplish people who do not associat Cadillac with GM. Also GM Authority better stop talking about Cadillac in 2017 since this would make Johann mad associating Cadillac with GM lol.

    Reply
  2. VW VAG-GROUP
    see how they work. They know how to make a perfect collaboration. they share everything.
    GM has been a minus not be able to work together and share. This has been one of the drawbacks. But things are starting to become the new leader.
    GM has been a minus not be able to work together and share. This has been one of the drawbacks. But things are starting to become the new leader. and has also been a lot has changed and the situation has improved and become better.
    still today some want to isolate any products. Cadillac, and that it is opel and so on. to be able to collaborate and share. This does not mean that all products are the same as in design than any other.
    and many of the bankrupt and frozen.
    VW VAG-GROUP. makes all of its products equally strong. and all assessed. But even within GM combat what is ugly to watch. Chevrolet will be just as good and strong as the cadillac.
    Opel can be as good as Chevrolet or Cadillac.
    it is important that all products are ideal

    Reply
  3. Lest we forget, Cadillac’s introducing an exclusive menswear collection, created and curated by cutting edge fashion designers!!!

    Granted, it’s not like Porsche design, where everything they create (sunglasses, Steve McQueen collection, shirts, jackets, footwear, luggage) is impeccably designed and feeds back into Porsche’s precise design and performance brand concept. And it’s available on Porsche’s website, not a third-party site.

    But, y’know, the random menswear collection is super hip, and should help Cadillac succeed with, like, millenials!

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    1. Cadillac’s marketing strategy makes me want to pull my hair out. As a millennial who likes Cadillac myself, I can already tell you that most millennials don’t respond to this: http://cfda.com/gallery/capsule-collections-ss16. Has Cadillac even done a study on whether 20-30 somethings even know what CFDA is?

      I think we’re looking at the results of Cadillac’s move to SoHo in hopes of harnessing the culture to create an appealing brand. Here’s the problem: the younger, “trendy” Manhattan fashion crowd (let’s refer to them as SoHo Fashionistas) DON’T set the trend for what’s hot among millennials. The only people who find the SoHo Fashionistas hot or trendy are other Fashionistas.

      Refer to the link I posted; I know people have varying tastes, but I think i’s safe to assume that this SoHo style is seen as fringe at best, bizarre and try-hard at the worst. Furthermore, there’s a certain irony about the menswear area Cadillac chose: Men generally don’t wear what’s put on display at these New York fashion shows. How many men at any level have any of you all heard talking about fashion? Most professionals, men and women, who could afford a Cadillac choose more mainstream and conservative styles compared to what’s at these fashion events.

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  4. Are we looking at the end of the ” Arts and Science ” design theme ? Crisp lines and sharp edges w/ line pipes are what distinguish Cadillac from everything else that is out there . Escpecially at night you know its a Cadillac just by looking at the taillights . So for the next 3 model years its going to be up to the CT6 and XT5 to hold things together while we wait for Johans ” vision ” to show up on the dealerships floor . Less volumn , less market share and higher prices . This folks is part of his vision , and its working . Sales have fallen off the cliff but don’t worry he has 12B’s to spend . What business school did he go too?

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    1. I seriously doubt there will be an end to Art and Science but a more compelling and smoother design language for the fourth generation for 2020.

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      1. Good. Art and Science is a timeless, distinguishable design theme. Nobody’s going to copy that.

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  5. Well lets revisit the past with Cadillac.

    As it was they sold more cars but made less money.

    Resale is dismal even more so than the other luxury cars. Not an incentive to buy new.

    The A&E has gotten Cadillac attention just as the early thrash sound Metallica has in their first albums. While classic it had appeal but not as wide spread. GM has and will continue to evolve it much as Metallica did with the Black Album. The point is to get wide spread appeal styling that will age well. The hard lines will age as well as the close on the Brady Bunch.

    Yes it will take time to remove Cadillac from GM. It will never entirely leave but you put enough space in between it will help Cadillac show that they are not just making fancy Chevys. Lets face it the last Fleetwood was a Impala for the most part. Even with the Alpha today sharing the Cadillac’s and Camaro they are flexible enough to make them not nearly the same with different styling. You get into the engineering of the Chevy and Cadillac versions and they are very different.

    The real key is to come up with a high tech quality engine line that is not shared. This will be the heart and soul of Cadillac. They will not just be putting in engines found in a Pick up truck. Not that the Chevy is bad but when you ask for more money on a car you need to deliver more product.

    As for the dealers if we lose some that is not really a bad thing. #1 GM does not need that many dealers anymore. They would like to have one in most metro areas and only a couple in most major metro areas. That is what the rest have and it makes for a much stronger and better run dealer network. This could cull the weak dealers and make it a way to lose the over burden of dealers we now have. GM can not just go in and buy them out or shut them down.

    Too many here are fixated on volume and that is not Cadillac’s mission any longer. Today it is profit per unit with a reasonable lower volume that maintains status, resale and exclusivity. GM for too long wanted to put a Cadillac in every garage and that is not how you do it in the upper range of the luxury market. A Ferrari is special because you do not see one everywhere. Same for Bentley and the higher end Benz. You get image and you can ask for more price if you have a better car and you can make more per unit. In the long run sell less cars make more money and own a stronger image.

    That is how Cadillac operated in the 20’s through the 40’s. It used to be special and you really had to be someone to own a Cadillac. Then they went the volume route and cheapened the image to where you find a new Cadillac in every bingo parlor parking lot and outside every trailer park rec hall.

    Cadillac needs to lose the lower class trash image and take on the rich trash image. What they are working to is when you see a Cadillac they want you to think I wonder what he or she does for a living. As it is now we think too often I wonder how much discount they got.

    This is not just a sell as many as you can and make a profit deal here. You do that with Value brands like Ford, Chevy and Toyota. To sell true luxury you have to do this differently.

    GM has F’e it up for so many years with selling too many cars at too high a discount and with too little investment in the product to do it right. What many of you preach is to go back to what they were doing and how did that work out?

    Check on how much GM is making per unit now and you will see even with lower volumes they are doing better than they were with the high discounts and lower prices. This segment you need to sell smart not wholesale.

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    1. Very interesting, but have never heard anyone discuss by raising the price point for Cadillac you are probably going to lose a lot of customers who figure, since I’m paying the equal of a BMW, Mercedes, I may as well buy and own one?

      Sounds very easy to close down dealers and buy them out doesn’t it! Where is that money going to come from? JN already has $12B to play with, how much more does GM need to deprive the rest of the company of to finance this crap shoot?

      If you look at July’s average ATP and the total sales, it translates to about $700MM. Needless to say, this is with the dealer mark up? How much profit can they be possibly making on less than 3/4 Billion in monthly sales?
      Sure is going to take a long period of time to pay back the $12B +ROI isn’t it. The long period in my opinion is going to be never. Hate to say it, but this makes the FIAT investment disaster look like pocket change.

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      1. Correct on your first point, but Johan’s game plan is to make Cadillac a real equivalent to those cars, rather than just a cheaper alternative.

        You would never say, “this BMW costs the same as a Mercedes, so I might as well get a Mercedes.” They are both equal competitors. Cadillac needs to be the same, and that’s the uphill battle.

        The problem many on the internet have is this obsession with returning to the way Cadillac used to be, but the world has moved on, and those who haven’t are in the minority or will die soon.

        Cadillac needs to be an extension of a luxury lifestyle. When you buy an S-Class, you do it because your life is filled with well-made tastefully-designed experiences; whether that’s eating at Michelin-starred restaurants, or staying in the St. Regis, you buy the S-Class because you want to extend this lifestyle to a place where you spend a significant amount of time. So, while we can appreciate the Cadillac of yore, it’s important to remember that today’s luxury buyers are too sophisticated to be fooled by a wallowing ride, column shifter, bench seats, and a landau top. Those belong in the past, respected but in the past.

        I get the hate for millennials, I really do and I am one of them. But you can’t keep selling to grandma and grandpa forever.

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      2. Martin you really are not seeing the big picture and you are trying to see this as a volume value luxury brand and not the low volume high image brand they aspire to become.

        It was made clear even before Johan came that GM intended to sell less cars for more money and make a larger profit. That was clearly stated by Mark Ruess a couple years ago. Johan really is the guy to enact Marks vision of where he wants this to go. Mark has been the point man on making Cadillac the standard others are judged by no the we are a good deal luxury brand,

        The key here is right now they have cars nearly as good in all areas and better in many areas now and even at the higher price point are still cheaper than the Benz and BMW. So the may as well get a Benz line is not true.

        If things go as planned they are targeting not just being as good but better than the other cars. Once they do that they need to continue to build the brand and image which takes time. Hell it took BMW a good while to transgress from the 2002 basic sports coupe to the M3 in the 80’s. It took about 12-14 years.

        Same for Audi as they were really crap cars moving into the 80’s. Pure rust buckets till the Audi 6000 arrived. Then they had a set back with the bogus 60 min story but they persevered and worked hard to get to where they are at today.

        Benz for the most part has ridden their special edition models and their heritage for years. Some of their cars are very impressive and many are not. Anyone still has any love for the 190E from the 80’s?

        $12 Billion is a lot for a division but for GM it really is not as great as you may think. To be honest it is still not enough to cover all that Cadillac needs to do but their own income will cover that. The $12B is seed money to get them on the right path a little faster. Just a new model at Chevy like the Malibu can cost 4 Billion to design and build. It is the cost of doing business. You have to put money in to get money back out.

        I really do not see this as a crap shoot. Right now they are making more money than before. In the past they were just treading water at best building a lot of cars and discounting them to the point there was little meat left on the bone. Not a smart way to work.

        Nearly any car of real value and image is not built in great numbers. Porsche tired it back in the 80’s and did a lot of damage with a lot of cheaper cars that really damaged their image. 924, 944 and even the 928 missed the target of their fans.

        Ferrari yet today has resisted selling as many cars as they can. They do this to protect the image they have taken years to cultivate. Sergio has hinted he wants them to Whore out but so far that has not happened.

        Image is controlled by supply and demand. You make more demand than you have supply you make a lot of money and keep the people wanting more. You build as many as you can and with in 3 years demand is gone, resale has tanked and image is toast. People of means want things no one else can have or can get.

        Just look a the idiots that will pay over sticker to have the first 6th gen Camaro’s that will be released. They will pay much more than the car is worth but they want to have what no one else has for at least a little while. More power to em if they have the money and the short term buzz gets them off. As for the Cadillac segment you want to create that same buzz but you want to sustain it over the life of the model. Then you want to recreate that with a new model and move that demand to that model.

        GM has the resources, engineering and technology to build some of the best cars in the world. There is no reason why they can’t, In the past the only thing that has prevented that is the board has refused to let the division and engineers loose to do the job they are capable. We saw what happened when Lutz told the Chevy engineers in drivetrain I have your back now do what you can do. We got the ZR1 and now the new Z06 LT4.

        Some folks are mad as they are now going to have to move to Buick but with their coming product that is not really a bad thing. The fact is to grow a proper image you can not sell a Cadillac to just anyone. People always aspire to greater things and that build image. Why do people wear a Armani Suit or buy a Rolex? Not really because of the quality but because they want to send a message I am better than you. That is what drives image. Some folks can do with out it and they may be smart to be that way but generally humans are vain and want to receive angulation from others for their position in life.

        The right people to run a division like Cadillac are people with strong images themselves. You do not want to take some engineer from some small Kansas town to plan a car for the big city corporate types. You need the worldly kind of people who rub elbows with the kind of people you are trying to sell to. Arrogant and snobby work in this area. You are not selling minivans to entry level families. Were not in Kansas anymore.

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        1. Scott,

          You are assuming that Cadillac buyers who are told to go take a hike will stay with GM–very bad assumption. Hacked off long-term loyal customers tend to take a walk. GM will probably lose most of these altogether. If this is a smart vision for GM, or a selfish objective for Cadillac? Have a suspicion that most of the spurned customers will not be buying Buicks, GMCs, and Chevys. FCA, Ford, and all the other foreign manufacturers have to be salivating at the likelihood of “conquest” business. Conquest business works both ways and not just in to Cadillac.

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          1. Never assumed. Some may go to Buick and some may go to some other cheaper model.

            You assume that the people who are buying Cadillac’s are making them money. The truth is the discount shoppers are not making them much money and because of them GM has had to build lesser cars because of it to keep the price down.

            You want to make money in the Luxury field you build a better car. Because you build it better it will cost more. Because it cost more less people will buy it but you will make more per unit.

            Martin you do realize that over 50% of all car sales profits come from the small number of Cadillac’s sold. It cost little more to design a Cadillac than a Chevy. The content does cost a little more but the mark up is much greater. That is why GM is investing in Cadillac. It is also why those at Ford who cared were able to save Lincoln. Their CEO was ready to shut them down but they pointed out the profit potential and it was given a second life. Now the question is will Ford invest as they need to in making them more profitable.

            As for image if Cadillac loses the Walmart buyers that is not really a problem. Just as Ferrari is not worried about putting a 458 in every garage GM is not worried about putting a V series in every garage. They will make plenty of money off the limited segment as it is and more money they have on discounted lower quality models.

            Like I have stated lower volumes and higher prices are how this segment works.

            Here is another example. In the higher classes when one see’s someone in a Boxster to them it screams I could not afford a 911. People think different in these classes. The Walmart guy see’s a Porsche while the higher class customer see’s a poser. You sell less of a car you hurt your top end image.

            While brands like Chevy need each and every sales and must not lose a customer as they are a volume brand Cadillac is no longer a Volume brand and need to sell to the right class of person and not just any Joe on the street at a discount.

            While it comes off snobby the truth is better people drive better cars. They could tell time on a Timex just as well as their Rolex but that is not the point. Not everyone has or can afford a Rolex. This is where Cadillac wants to go. Even Land Rover sells well at lower volumes and make a hell of a profit because it cost more.

            In this segment you are selling vanity and image not just cars. When they buy in this segment it is what will your product do for my image not my pocket.

            We all could get around in a Chevy Spark for the most part. Lets face it we drive alone and back from work mostly one person to a car 5 times a week. And why do we buy better cars well because of what they offer in comfort, space and the image they transmit.

            If you have not notices with the higher Vette prices Chevy lost some customers. But they also picked up many because they are now selling a better car and because the image has improved. We see folks in a Corvette today that would have never been in one in the past.

            Look at Harley Davidson. They ask top dollar for their bikes. One I sat on the other day was nearly $50K. They do not make the most advanced or technology leading bikes but they have an image you can’t design. They have earned the image over the years. During the AMF years the image was nearly lost with a series of cheap and trashy smaller bikes and lower quality bigger bikes all in the name of volume.

            Once AMF was gone they went back to basics and sold less bikes but better bikes at higher prices and the image has returned. Many models had waiting list due to the increased demand and the fact they were not over building and selling at a discount.

            You mistake that this is a volume game the conquest is to sell less cars for more money to higher end customers. To do that improve your product to where you lead the segment and sell less cars not at discount prices.

            Incentives do nothing to improve image. Do you want to be the boutique of luxury and class or do you want to be known for your customers on the people of Walmart site?.

            The bottom line is Cadillac is not for everyone. The next few years will be tough as Cadillac transcends to becoming the company they aspire to be. This segment it is not important to be number one in sales it is more important to be number one in image and profits.

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        2. I’d slightly disagree least with the Porsche’s 944 has a cult following now, many are buying the older 911’s because they love the air-cooled and that’s the only porsche’s they would ever want, water cooled are great ones to, , cayman’s are great too. as for the Mercedes 190, only one that is really loved still is the 190 cosworth.

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          1. Drew the point is the Porsche and I mean the real Porsche fans rejected them back then and rejected them now. You can buy one for less than I could sell my Fiero for. That is not food.

            According to the many people who are buying the 911 Air Cooled cars they love them because they are cheaper to repair. More basic as Porsche was intended to be . Today the new cars get old and are so expensive to repair that they are not worth the cost at some point. Thee was a story on a 933 in recent publication pointing out how expensive it is to buy a 933 even at a used price of $10K. Nothing but a money pit.

            Same on the Cayman and Boxster as there is nothing cheap or easy to repair. You can pick up decent looking cars cheap as the labor and repairs cost more then the car is worth.

            Just has a buddy who bought a 928 for $5K in good shape. then the fuel pump went out. $1500 just for the pump if you can find one for a car that only cost $5K to start with. He said he now understands why people buy Chevy engines to drop in.

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    2. Well, it’s a little confusing when, first, JdN is focused squarely on margins over volume (makes sense).

      And then, last week, he announces a 500,000/yr volume target by 2020.

      Not a margin number. A volume number.

      He came in with a clear vision. His alma mater, Audi, outsells Cadillac with 60% fewer dealers than Caddy’s 900+.
      And Audi isn’t super-reliant on SUV/CUVs. But they do have good product across the board, and a pleasant , luxury dealership experience.

      I want to see this work. In the meantime, I hope the dealer council and the RenCen aren’t starting to drag him down, or at least soften the edges.

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      1. Right now the volume for many of these brands are in the SUV segment. They affect the Image not as much in volume and you can still charge obscene prices for them.

        There will be some upset dealers and dealers that will not be here in 5 years. That is not really a bad thing as some of them have to go. The lower volumes over many dealers will hurt them all. The less dealers with lower volumes will make for a stronger network. GM can not force them out or pay to buy them out. The lean times will help determine the strongest and most strategically located dealers that will survive.

        Look for them to be made to have their own show rooms and service and that may cull more.

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        1. Scott, like my first question. What do you think we will see Cadillac in 2017, Cadillac Motor Corp, Cadillac LLC, ? Will Cadillac have its own stock? Is it going to be spun off of GM? These questions will be more then ever important for Cadillacs new image.

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          1. Dan

            We will only see minor changes start in the models as mid 2018 we will see what I expect refreshes of the ATS and CTS as they transition to the CT5-6. It take two model years to get there and the timing would be about right. We have already been told change is coming to these two models.

            As for stock no Cadillac is not going to be spun off on their own stock. You first have to fix the brand and then once it holds value you can get away with that and even then it is a risk.

            Ferrari has been majority owned by Fiat for decades but it has not hurt their image. But if you look Ferrari has been run separate as their own entity and little has been shared with the other models accept in rare occasions. Most of these efforts never went far.

            Just now Sergio is wanting to spin off Ferrari from Fiat with their own stock. They are a strong brand and can do it but there are risk that if the stock dives someone could come in and steal the brand away from Fiat with out a fight.

            To keep stock up they may have to raise volumes and even do a SUV that would and could damage the image of the brand.

            Cadillac’s main goal at this point is to prove that they may be part of GM but they are not run by GM. It is more of a way to show they call their own shots and make their own way. Where the money goes back to matters little. They want to provide proof that the same guy who is calling the shots on the Spark is not calling the same shots on the CT8.

            This is similar to how VW operates as their divisions are all owned but generally they call their own shots and do not follow direction only from VW.

            Hell Porsche likes to sell itself as a German power house but many of their cars are no longer even made in Germany anymore. But the image still exist. The SUV’s, and Boxster and Cayman are all made in other countries.

            Cadillac is just looking to gain their own room and space and be more their own brand not just another division of GM.

            It was much like this in the old days. Cadillac did their own things and used their own body suppliers outside GM. They tailored cars to their customers and were on par with the best on the market. Yet they remained a part of GM.

            For volume they relied on LaSalle at a cheaper price much like Buick will be today.

            I would look like I said to how Ferrari has been run under Fiat for the last 40 years and that is pretty much how Cadillac will be run. I never expect Cadillac to ever be spun off. As the image of GM continues to improve it will matter little. With the new Buicks and Chevys the GM brand itself will not be as damaging as time goes on.

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            1. Thanks for the response Scott, it makes some sense the way your describing it. But here is the bottom line, Barra and Dan Ammann will be the ones that will have to fall in the sword of this plan flops. I bet GMs Board is going to watch this carefully over the next few years to see how it works out. There is no guarantee that it wil work in which case Cadillac will be in shambles. I am all for making better cars and leaving the old Cadillac behind. But Johann/GM has plans that are way to far fetched for a brand like Cadillac. He made headway at Audi because let’s face it, they hardly had an identity to begin with. But Cadillac is a different story.

              I am a bit worried about Cadillac, it’s my favorite car I have owned several of them and one of the biggest reasons I am a GM man I just hope they know what they are doing. I am not a Johann fan but I also realise we all would be very foolish to believe he came in and made all these changes on his own, I think he is more of the cheerleader that just advertises all the changes.

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              1. Dan you have to look at this from a Lutz perspective as that is the new culture in GM he started.

                Would you rather fail and fall on the sword doing nothing or would you rather to all you can and if it fails you at least tried.

                For too many years GM has had big plans for Cadillac and every time they under fund and under cut the plans.

                Case in point they do a DOHC engine finally to compete. But they take the cheap way out and have oil, ring and head issues. Some of this was due to the money crunch at GM but some of it was the just good enough mentality the leadership had.

                Just recently during the CT6 development Mark Ruess before Johan wanted better door handles for a few bucks more. He was told no because of the cost? At this time the CT6 was to have been the flagship and Mark wanted better than parts bin parts but was told no?

                I support the way Johan is going and will the first to say there is some risk here but if there was no risk there would be little gain too.

                I see his vision as a modern vision of Cadillac of the 30’s. Back then it really meant something to have a Cadillac. That is what he wants to return this too.

                I will give him and Mark credit for getting the money and freedom to act as they have as no other Cadillac leader has done as well.

                I like how he has come and said what we have now is good but not good enough. That is a dose of reality. While GM has bench marked the others they have not surpassed them.

                Johan is more than a Cheerleader. He is a leader directing a team of key people who are now are being empowered to do all they can to make this work. Lutz did the same thing with various parts of GM and that is where we got the better engines, design and panel gaps. The old system made people wait till they were told to do something today they just are told to do it and we have your back.

                As it was Cadillac would have remained a marginal almost as good product in the eyes of the general public. I think with the money and time Johan can make more headway in the next 5 years than we have in the last 40 years.

                Again we need to measure this by profits not volume. In this segment it’s about making money not how many you sell. Over all profits and unit profits are the true measure here.

                It will not all be Johan single handedly doing this but he is like an orchestra director and will guide many talented people and give them a chance to show what they really can do.

                Lets face it the CT6 will be a good car a good triple but not the home run and he was willing to admit this and also the flaws in the ATS and CTS. Now they are great cars but they need to be better yet. In this segment you need to make a statement with your products to stand out.

                I think them moving to their own engines and the like will really help set them apart. As good as the Chevy engine is it should be embarrassing to ask $100,000 for a large sedan with a engine in it from a pick up truck or $45,000 Camaro. The customer looks at this and see’s no perceived value.

                Now you can get away with putting a expensive cars parts in a cheaper car to a point but never put the cheaper cars parts in a more expensive car and expect people to be impressed with their purchase. This path only flows down not up.

                I would not worry too much. If they had stayed as they were I feel the dangers of failure were much greater. How long can you survive on high discounts on luxury cars? The 300 is now selling for the price of a Malibu in V6 mode. Just what value is that to Fiat? Just think about the money left on the table there. They had a good start and Sergio pulled the plug. My in-laws got a heck of a buy but Fiat made little on the deal.

                GM has much more to gain than lose here. Also factor in the SUV and CUV sales they will be ok. Those alone are pure profit and what will support the luxury class going forward. Sedans and coupes are secondary to them Important but not as important as they once were.

                I would be much more worried and fearful if they remained on the path they had been on. GM has so much more they can do and offer and it is time for them to show it and where better than Cadillac.

                Even if they try to separate themselves from GM a strong Cadillac will still reflect well on GM as a whole.

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                1. You come up with good points Scott. Are you by chance a GM insider? You do have a good balance of history and knowledge that a lot of people don’t.

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                  1. No but I did stay at a Holiday Inn Express last week.

                    No I am not but I do work in the performance aftermarket and grew up with a great uncle who was like a grandfather to me that worked at GM from the 20’s-40’s as a lead engineer. He taught me much about the industry and how things worked and unknowing looking back how things did not work.

                    I also have many people I know in the industry at the various automakers I deal with through work. I hear some times things that are not published.

                    It is fun when they say I should not show you this but Look At This on a lap top.

                    I know this whole deal is a risk but the way I see it this would be a greater risk not to be more proactive.

                    GM did not go down the tubes over night and it will take time and investment to fix what is all wrong. GM has had many people that could have fixed the issues over the years but the Culture prevented this. The way I see it now the Culture has changed enough to let them step up and do what needs done at the Division level. This freedom I have not seen since the Delorean era at Pontiac when he broke many rules. He was a hero when it worked but the culture came down on him when things went wrong. I do not see this happening today.

                    When Lutz was there he was fought on the Cruze by making it a better car and asking a little more. Even when sales were great many inside wanted to go back to the old ways of cheap stripper cars. He said that is like cheapening the food at a restaurant that had just made a reputation for great food. He said you can wait two weeks for a reservation with the good food then cheapen it up and then sit there with empty tables.

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        2. Scott

          How do you propose some of these dealers got to go? Daddy big bucks GM to cough up another $12B to buy out the dealers. You make it sound so easy?

          The overriding consideration here and some of you lose sight of is it should be what is good for GM rather than what is good for Cadillac! You have the tale wagging the dog! A division that will probably generate sales of maybe $8Billion this year can hardly be considered a profit dynamo.

          All I can say is when I go shopping next year for a new vehicle to replace my 2014 ATS, I will be cross shopping GM for the 1st time in 25+ vehicles. If I am going to “almost” pay the price of the Germans, I may as well cough up the couple extra bucks and get a better automobile. I’m sick and tired of hearing the current Cadillacs are “almost” the equal. The bottom line is they are not and will not for many years if ever.

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          1. Not easy at all or it would have been done already.

            The lower volumes will finish some dealers off. the smaller and lower volume dealers will struggle and either go out of business, merge or move to other brands. Cruel yes to long time dealers but GM can not afford to buy them all out and the fact is they just have way too many dealers to keep the network healthy. The laws protect the dealers so much GM has few options than let the low volume dealers die. It is not a case of easy it is a case of few options.

            A healthy Cadillac is good for GM as the money will becoming back to them. Cadillac is the most profitable thing per unit they have outside trucks and full size SUV models. Many companies today are looking to Luxury units to help them when they start taking hits on truck sales when the half ton market takes the EPA hit in 2025 and later. This is why Ford had a change of heart as they were shown buy the Lincoln supporters with in how they can provide back up income that will be important in the future. Even if Lincoln is 5th or 6th on the sales list the income will still be good as again it is not about volume just profits and income.

            The fact that you and others who can afford a Cadillac will cross shop the Germans is a good thing. In the past you could never get anyone to consider Cadillac in the same sentence. This is where the improved products will be important. As while I am sure you like your 2014 and it is a good car it still needs to be better. No longer matching the Germans is important but besting them in all areas is key. That is where the $12B comes in.

            The new Cadillac’s are not equal in all areas. Some they do hold an advantage in other areas they lack. This we do agree. But It is not going to be many years or if ever to where they are fully better. The only thing that has held GM back is the lack of proper funding and people with in that supported building a better car. Too many years it was well we can just build it good enough. That culture is gone.

            Unless economics or world crisis comes into play I expect Cadillac to make some real changes in the next 5 years and fully develop in the next 10 years,

            Who would have ever considered GM would cough up $12B to a division already invested in greatly. Also who would have ever though Cadillac would be given their own engines again by GM. Those two things alone are amazing that they are willing to go all in to make it right. Making money does some good things to change thinking at a company like GM.

            The future playing field is much different and even the Germans can not remain idle. BMW has suffered of late as they are not making cars as well as they used to. Many people long for the cars that drive much like the new Cadillac’s.

            Porsche is hurting with the 911 right now as people are longing for the Air Cooled cars they no longer can build. The prices on the older cars are through the roof now because the 911 fans are tired of the high cost of maintenance of the new water cooled AWD models.

            Benz is just going along yet with their good and bad cars like they always have.

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            1. Hi Scott

              Just wondering how far the $12B will go when the lawyers need to defend all the lawsuits the dealers will ultimately file? If you think they are just going to fade away into the night silently, you are sadly mistaken. But then again, big $ corporate will undoubtedly end up defending all the lawsuits, so Cadillac can spend $12B+ to sell 250K cars a year. The 250K units will be extremely profitable since they won’t have to absorb any legal overhead!

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              1. This is where you settle for much less than the buy out if it even comes to that.

                If they don’t sell cars they will change to other brands. It has happened often.

                The money would not come from the $12 Billion anyways you should know that if you really understand how this works. The legal department would handle any cases and GM would handle the payments directly.

                Or GM can do just as you want them to do and cheap up on the cars, sell them at a discount and try to sell them in numbers so large there is no resale value or image. That has worked real good the last 40 years.

                Since you appear to not like change and appear to want to go back to the old ways of Cadillac would You want to make a Cruze a Cadillac too?

                No one said this was going to be cheap, easy or fast to turn Cadillac around but to do nothing would surly mean failure and lost profits. Hell Chrysler now has the 300 Targeted at the Impala talk about a major case of money left on the table.

                GM will weather the ignition issue fine and that will be much more difficult and expensive than losing some Cadillac dealers.

                The bottom line is this. Cadillac is not going to sell as many cars as in the past. To make a better stronger dealer network and profits for the dealers they will have to lose some lower performing dealers. Life’s a bitch at times. Sometimes you have to lose a finger to save a hand.

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                1. Very much understand where the money will come from for buyouts and lawsuit settlements. Whole point is the $12B investment is a joke. This will entail something well north of $12B.

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                  1. $12B is for the investment in the car lines over the next 5 years and that is all. Money will be coming in from sales and from GM for all the other needs. You have to count all the dollars not just the $12B from the next 5-7 years set aside for development.

                    To be honest $12B is not what it used to be and I hope it is enough to get what they need done in this time.

                    You appear to mistake the $12B as the entire budget for Cadillac when it is only seed money to make changes on product up to 2020-2022. This money is not even counting the money Johan is paid.

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                    1. Scott –

                      I get what you’re saying. But if $12b is ‘seed money’, any idea what the total investment in Cadillac would be?

                      Like, if Johan went on Shark Tank, with a plan to reinvigorate a storied marque, and it’s gonna cost north of, say $50b, I wonder what the response would be?

                      Not that I use pop TV as a measuring stick. But I just wonder what the bottom line investment will be, and when profits from expanded margins start to outpace costs.
                      (Not that anyone really knows).

                      I get a sinking feeling when I think about how they say 90% of your medical bills come in the last year of life. Eh.

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                    2. Wait no one at this point can be sure how much it will take.

                      http://fortune.com/2014/01/23/the-next-thin-slice-of-luxury-from-ford/

                      Here is the deal all luxury cars account for 11% of all car sales but bring in 50% of all profits. Cadillac holds similar numbers inside GM.

                      The key is GM is not losing money now and is unlikely to lose money in the future on Cadillac so the risk are much smaller than many think.

                      We first need to see more of Cadillac’s plans to know what it will take moving forward. On the outside it would be difficult to call. But with that said the added income that will come from these better cars should better cover this.

                      Keep in mind too the $12B was not budgeted money and was brought in as requested to take the division to the next level. Once there they will be better able to maintain their position.

                      Challenges lay ahead for all Luxury makers with tougher regulations.

                      Keep in mind it takes money to make money.

                      Shark Tank is not really a good measure as you say as this is not a start up with one product. This is a large international company that is very diverse and can better deal with issues like this. Now that the debt is gone they have been more able to fund things like we have not seen in over 50 years.

                      This is not old GM so spending is not like it was and profits are much more generous than they have been. They are in a good place right now. The only thing they really would like to see is a growth in stock prices. Ratings of the stock have improved but the price is still sluggish.

                      Look for Chevy sales to increase with the new models and that should help with the stock prices.

                      Now if we were pumping money into Chevy like this and had to see the related increase in sales numbers to make up the difference with lower margin Chevys it would be a much greater risk. You have much more room to work in the Luxury market vs. value segment.

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            2. http://www.autoblog.com/2015/03/26/spike-air-cooled-porsche-911-prices/ or another take on why the prices are going up but it’s not the only car, many are because you hear many don’t like how some of the cars feel etc, On another part you mentioned on here about the c7 (1st time that others are liking or buying the brand) corvette and i agree first time i like the corvette, it’s pretty damn nice. still like cars around that like the 911 and cayman,

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              1. Hmm looks like the edit didn’t work, but also a big part of why older 911’s going through the roof is nostalgia and Sounds etc that also apply’s to other cars. New ones are pretty nice, the 997’s and 991’s of the newer 911’s i love, ones that ti know of love their cars.

                I”m looking forward to reading more about the CT6, i hope many trade in their DTS’s etc, Ats is my favorite Caddilac beautiful car.

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                1. No one said the new cars are not nice. They are some of the most advanced cars on the road.

                  There in lies the issue. As they get older the cost of keeping them on the road is not worth the price of the car.

                  As a new car they are great as a used car they are horrible.

                  As for the CT6 the reviews will be similar to the CTS. Mostly great but still lacking that little bit to put them clearly ahead since it was built on a tighter budget.

                  The real thing will be is how athletic it will be for a larger car. The lower mass is a much greater performance enhancement than just power alone. It not only makes it go faster but turn and stop faster. It fixed all three dimensions of performance not just one.

                  Note today the Corvette remains popular in the used market as it is still fairly easy to repair and cheap for the most part in todays money. That could change with the newer models though as they get more advanced. The aftermarket parts have really kept things cheap though.

                  Ever change a water pump in a Boxster and if you have you would understand the Porsche dilemma.

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  6. Let us see if the “Plan” works. I personally would not pay ‘sticker price’ for an Escalade ESV (but it is a nice ride) to replace my aging Suburban. I’ve been a GM guy for many, many years and would worry that others think the same way…and ultimately change to another quality brand instead of waiting for possible incentives. What if the economy takes a hit and sales slide more? Best of luck.

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  7. if Cadillac is going to add all-new cars…. they should look like new and fresh cars…..not the current Caddy design theme.

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  8. I’m guessing there is quite a bit of work to be done!

    Can’t locate where the information surfaced, but there was a positive blurp somewhere that Cadillac inventory on Aug 1 was 69 days–sounds impressive. BUT, cars where 107 days, up from last months 95 and the drop came in trucks/SRX that dropped to 51. The SRX dropped 23 days, a lot of that the result of incentives.

    The ATS sits at 154 days, the CTS at 100 and the XTS at 62. The CTS dropped 3 days from July, and the XTS 2 days. The ATS increased 44 days and now stands at 154 days! The chart I looked at showed only two cars being sold in the US with higher inventory levels: Fiat and the Honda CRZ.

    Yep, a lot of work to be done. Guess they could consider shutting down the ATS factory for 6 months because there is sufficient inventory to almost cover.

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  9. Cadillac need more cars soon…..and new fresh ones not just under the skin but on the outside as will…. the CT6 broke new ground under the skin…. but not on the outside… a few years ago I was expecting the CT6 would be a true flagship ……but I was wrong ..I was disapointed when it broke cover…..the CT6 looks nothing like a big iconec car… just a big CTS….the Cadillac lineup and sales has gone a bit stale AND SHOULD ADD NEW CARS SOON.

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    1. Rye,

      Agree wholeheartedly. It seems since the ATS, is has been ATS Medium, ATS large, and I guess somewhere the flagship will be ATS super-sized!

      I personally enjoy the Art & Science style and the main reason I bought my ATS, but am guessing it is getting a bit old for the general public. Style probably needs to move on.

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  10. it already has gotten old…..every Caddy looks the same……and the same as years ago…..its time to move on with styling.

    Reply

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