Cadillac is a hot topic these days. Enthusiasts are vocal, journalists are skeptical and General Motors is hoping for nothing but the best. Since GM CEO Mary Barra took her position, Cadillac has been of great importance to her, as she signed off on sending the brand to New York City, allocating $12 billion for rebuilding the storied marque.
Recently, she sat down with Bloomberg to discuss the status of Cadillac and the brand’s process. The headline maker? “I’m very committed to Cadillac.” Barra has remained quiet on the Cadillac front since shipping the brand off to New York City, where President Johan de Nysschen and CMO Uwe Ellinghaus have been instrumental in ushering in a new feel for the luxury division.
“I really think Cadillac, as we continue to move forward, will define this transformational industry of what luxury really is,” she added.
Barra also touched on Buick’s opportunity in the premium space, where she shared the same sentiment, playing up the fact it is an excellent bridge brand from Chevrolet to Cadillac.
Comments
Give up! Sell Cadillac to the Chinese and use Buick to compete against Lexus, Audi and Lincoln.
Stop.
Steve – remember when Michael Dell gave Apple Computer advice in the 90s, to the tune of “sell it off and give money back to shareholders”?
Fast forward twenty years, and Apple is the most valuable company in the world and is roughly 15x more valuable than Dell.
I have a feeling that, just like Mr. Dell, you will be eating your words in a matter of a decade or two.
Reliability, reliability, reliability. If Buick can do it Cadillac better.
Cadillac is in transmission and things will remain in flux for a while.
Cadillac is like planting a crop and working on it for a good period of time and working to where you have a good harvest in the future. In this planting season we are only in may and things are just sprouting or have not even sprouted.
The key here is Cadillac is turning a profit and will continue to turn a profit while they sort out the models and volume. The key here is profits first and let the rest work out.
GM for the whole is doing this now. While some wring their hands because sales are down GM is as profitable or even more profitable than they have been in decades. Here again they weeded out the low profit models that did more damage to the resale of the other cars making GM cars lose more value to Honda and Toyota that do not do much fleet sales.
You can make a billion cars but if you so not make much money on them then why make them. Making less cars and more profits and let the volume balance itself is the right way to go.
Other companies have done this and thrived. Case in point.
Goodyear tire was to the point they were hemorrhaging money like GM and was on the way to bankruptcy. They got a new CEO in and the first thing he did was make them focus on their core product tires again. The second thing he did was lose all the low profit tire lines an cut nearly all Original Equipment tire sales.
Note OE tire sales in most cases is a no profit effort. I had a FIrestone OE manager explain to me how the companies do not want to pay anything for tires and generally they sell lower models and also older models to the companies just to get their name out there.
Only in cases where tires are developed for specific cars like the Corvette, Camaro and High End Cadillacs do they get much profit. Or in the case of the Volt GM paid Goodyear well for their fuel max tire as it did extend the range much and still handled well.
In the past Goodyear sold so many more tires but were going broke and today they are focused on higher end tires less OE and higher profits that they are able to pour back into the development of new tires. Today profits have been high and even record setting. They have gone from a company that was going to kill the blimps and go bankrupt or being taken over to a company that is setting profit records and building a new fleet of 3 $20 Million Dollar each Zeppelin.
Goodyear has left the Handkooks and Pirelli of the world to handle the cheap tire sales as they make most of them in Korea and South America and are not the best tires you can find but they are getting their name in the market and hope they can grow business this way. Good luck to them but as most major tire makers have learned you need to be selective in what you do or you sell a lot of product but come home with empty pockets.
GM is following a very similar path as Mary pointed out in her press conference. They are working to get to the core product that sell and not worry about a bunch off odd low volume cars that do not make money. They are plowing money back into new products and technology to lead to better and more reliable cars. And while all this is going on they are making money like they have not made in decades.
This formula will result in better vehicles and higher volumes as they continue to improve product.
Just building cars for the sake of volume is a losing proposition over time. Profits are number one and you then balance it with volume If you do it the other way you end up broke as we already have seen GM do.
As for quality now Buick and Cadillac are not better or worse than each other. They all have their good points and they both have their faults.
“As for quality now Buick and Cadillac are not better or worse than each other. They all have their good points and they both have their faults.”
Consumer Reports —
Buick — Better than Average reliability and rated #7 of all brands
Cadillac — Worst reliability and rated #24th of all brands
Cue a GINORMOUS irrelevant spew of biased crepeola… WAIT FOR IT…
The 2015 GM Authority post by Diego Rosenberg referenced above reveals Cadillac’s plan to strongly focus on the Chinese market which it is plainly noted was (and still is) hindered by Chinese tariffs on imports, thus necessitating massive investment in Chinese factories in order to be competitive there. It wouldn’t be inaccurate to venture that most of the aforementioned $12B was invested in China simply to overcome unfair trade practices.
It’s a pity because a greater portion of that $12B should’ve been spent designing and engineering the best premium luxury cars in the world, which would in turn be eagerly sought by status and style conscious Chinese movers and shakers regardless of tariffs. Hopefully a much needed change in US government leadership come November will assure that justifiable policies are put in place to level the presently very crooked (spelled l-o-s-I-n-g) Far East playing field.
Meanwhile, are we to believe that Mary is satisfied that de Nysschen and Ellinghaus have burned through countless millions merely “ushering in a new feel” for the Cadillac brand? Charming. Isn’t it totally obvious quite yet that it’s time to stop investing in complete malarkey and put the money into the crucial business of designing and building prestigious, highly desirable Cadillacs that’ll appeal in all world markets? Tell us again how committed you are, Mary…
GM has the talent but it’s hard to see their top designers sticking around knowing that while working for GM, their best designs will never see production regardless of the public’s reaction. This has proven a sad truth. Mary should’ve made it a priority to put the Elmiraj into production to cement Cadillac’s reputation as a producer of Standard of the World premium automobiles – status symbols. Something this massive, wasteful investment in NY marketing hype and China have both failed miserably to accomplish.
If she cared about Cadillac, she would do anything to improve it’s global image. In Europe there are only a few dealers which are shared with Opel (what a crap), there’s no service, no spare parts availability, no RHD in RHD markets, only I4 engines offered, information on cadillaceurope.com is mostly fake (many service points/dealers listed there don’t exist anymore), no marketing, no advertising. Complete parody of a car company. And she is responsible for it. Meanwhile Ford offers Mustang and Edge in special Ford Stores (and might soon offer Lincoln) and Tesla is growing.
Wow, thats cool. They are rebuilding the brand… Oh wait, cadillac’s dated flagship starts under the 60 which is cheaper than the base e class. wooooww. thats so cool
I own a 2010 CTS, and do not want to purchase the new one 2016. I like the size of the one I have now. The newer models are going to be larger I hear. Just improve on the future models with respect to cabin noises and quality of interiors. Also check out the ease of handling in steering. My 2015 Colorado truck steers easier than my Cadillac.
After saying all of this, I would purchase the Cadillac again! Of course if the price was easier on my pocketbook. DAH!
I think MS Berra needs to clean house at Cadillac !!!
She needs to develop and executive team that understands marketing and sales.
Since Cadillac has been in flux/rebuilding mode for the last 20 years, I keep buying new Mercedes every 4 years waiting for the time where they are to be considered as equals so that I can consider one.
If General Motors is to rebuild the brand and truly be daring, they can’t stop production of some models like the CTS Coupe and Wagon because of low volume sales especially if there’s no lost in tooling and engineering as Motor Trend’s YouTube video said Cadillac claimed they only needed to sell 39 CTS Wagons to recoup the engineering and tooling cost; Cadillac’s new slogan is supposed to be daring.. there’s nothing daring if you only build what sells.