Should GM Spin Off Cadillac?
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The auto industry as a whole is still grasping what just happened with the ousting of Johan de Nysschen as the president of Cadillac. The outspoken executive was, outwardly, the most ambitious leader the brand has seen in decades, and seemed committed to turn the brand around. Whether it was going to be the rebirth of an American icon or simply a German-brand alternative at the end of his 10-year plan, we’ll now never know.
The turmoil still has columnists and analysts openly theorizing what would be best for Cadillac. Columnists going as far as to say executives at GM lack vision to transform the brand, to analysts suggesting that General Motors should spin off Cadillac a la FCA to Ferrari in an IPO, or even a sale to another company.
If GM does indeed lack the proper vision to turn Cadillac around without Johan de Nysschen, then perhaps spinning it off might be what’s best for everybody. However, if new brand president Steve Carlisle and marketing chief Deborah Wahl have the conviction to maintain course with some of JDN’s strategy of building up desirable products and uplifting the dealership experience, then Cadillac might be better off within the GM fold.
We’ll take this moment to ask you, the readers, what you think should be the next major strategy for Cadillac. Should it stay? Or, should it go off on its own, even perhaps to more welcoming arms?
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What’s the advantage to Cadillac being spun off from GM?
Unless it expands sales massively, Cadillac would be too small to keep up with technology and production changes, as happened with Packard (independent US luxury car maker, former number one, unable to compete with GM-backed Cadillac and Ford-backed Lincoln).
If it’s about some theory that some people don’t buy Cadillacs because they are owned by GM, that’s silly. Volkswagen owns Audi, Bentley, Porsche, and Lamborghini – does anyone not buy those brands because they are owned by VW?
As far as more crying and whining over the firing of JdN, get over it. He lacked the background and ability to run Cadillac. He made big promises about “the future”, but he couldn’t deliver, even on a simple car like the XT4. GM rightly cut their losses on this guy, who never should have been hired in the first place. Even the Morgan Stanley analyst (Jonas) who is pushing the spinoff, says he agrees with firing de Nysschen and hiring Carlisle.
Clearly Cadillac benefits from being part of GM. And GM will benefit from Cadillac if it can become a profit center again, which should happen if they stop trying to make faux-German cars and go back to being the leader in American luxury cars. They might also stop the silly and expensive distractions such as locating HQ in New York City. No one is fooled that Cadillac is a “New York brand” if that was the intention.
What GM should do is to provide clear guidelines of what they want the Cadillac brand to be. The problem with Johan was that he thought he had carte blanche to make the brand whatever he felt like making it. Cadillac is an American icon with a history and image to be embraced, not shunned. JdN didn’t know what Cadillac was, and apparently no one at GM told him what it was or what they wanted it to be. Imagine if someone didn’t know what Ferrari was, but was given the top job and they decided to make nothing but golf carts – is that the fault of the person or of the board of directors, in hiring the wrong person and not giving them guidance?
Carlisle should be given guidance on the goals of the brand, rather than devising his own plan and then getting fired for going in the wrong direction. At the very least he should present his own plan of how he views Cadillac as a brand and how he intends to carry it forward. If the GM board approves of this, he can go forward with those plans, without too much worry that he’ll get fired. Of course if he can’t execute on his own plans, he’s still likely to get fired. But hopefully he will have a sound plan to restore Cadillac as a leader, not a follower of anyone, and the board will give him support for at least 10 years.
Whoever gave that a thumbs down would rather see Cadillac get spun-off and eventually owned by a foreign entity. That is exactly what would happen. Have been with GM my entire life, through the good and not so good. If they sell Cadillac – last straw I’m done.
“What’s the advantage to Cadillac being spun off from GM?” – It protects an iconic brand from the destructive GM Board of directors while giving shareholders a dump of cash.
“Unless it expands sales massively, Cadillac would be too small to keep up with technology and production changes, as happened with Packard (independent US luxury car maker, former number one, unable to compete with GM-backed Cadillac and Ford-backed Lincoln).” – See Aston Martin and its AMG partnerships. See Ferrari and Harley Davidson and their key-chain sales.
Key-chain sales? That’s what this is about? GM/Cadillac could do that right now, if it’s such a lucrative business. As to small independent automakers partnering with bigger guys, that’s all well and good until somebody decides it isn’t working, or the big partner decides that the little one is a competitor and decides to squash it or effectively hold it for ransom, overcharging for parts and services. There’s nothing like full ownership for a full commitment. Aston-Martin relied on Ford until recently, and only has the AMG-Mercedes partnership since 2013. See how well that goes for Aston over time, and if Aston wants to be more than a boutique brand, they won’t be able to count on a fair shake from AMG-MB. Cadillac’s sights are much bigger than what Aston is today, yet no “partner” would put up with that or fail to take advantage of it.
As to protecting an iconic brand from “the destructive GM board”, that sounds like more whining from the Johan-cheerleaders and apologists. Johan was the one destroying the iconic American brand, and the GM board stepped in and stopped him. If Cadillac had been an independent company, somehow surviving the cost structure of independence, Johan would have killed Cadillac except as a name. And who really needed another copier of the Germans? GM came to their senses and realized that this iconic brand was in jeopardy, under a guy who had no clue what Cadillac meant, as well as lacking the competence to run ANY car brand. GM knows the value of Cadillac, and they know that the shareholders know it too. This is a for-profit, shareholder held business, like it or not. It was never meant to be the plaything of some random Johan from South Africa, no matter how big he talked about “the future”.
#CadillacIsSaved
#GoodbyeSauerkraut
#ItsAllAboutTheKeychains
The strawmen you dump is ridiculous, Drew. I don’t think they should spin off Cadillac and I was only telling you why Ferrari was successful because I love to call out your ignorance.
Take off your bigoted blinders man and form a rational opinion for once!
“This is a for-profit, shareholder held business, like it or not. ”
I know, I am a shareholder. EVERY RATIONAL SHAREHOLDER IS WORRIED BECAUSE GM BOARD HAS SHOWN, HISTORICALLY, THAT THEY DO NOT HAVE THE LONGTERM INTEREST OF THE BRAND IN MIND.
I”m assuming you put your savings in a jar under your mattress instead of holding stocks, but it is laughable how you can claim the board’s actions are because of some sort of fiduciary duty.
“Let the new executives prove themselves” is my choice.
The thing is that GM needs Cadillac; not vice-versa. Cadillac is the crown jewel of GM. It would be like asking the United States to get rid of Hawaii.
Cadillac is America’s Pinnacle brand and is as synonymous with GM as is Chevrolet. The rebirth started back in 2003, with the CTS and then ’04 with the first V-Caddy. The idea wasn’t to become a German car maker or even emulate them to much, but to do what Americans always do best, use our ingenuity and beat them at their own game. The V-Series has more than done that and replacing European strategy, although well intended and experienced, with North American thinking and leadership, I think is a good thing. More V cars, every Caddy model, lower prices and raise quality and bombard TV and the internet with patriotic, flag waving, tecno-touting advertising and the Krauts and Tesla won’t know what hit em. Every time GM thinks a little out of the box or takes chances good things happen and great cars are built. More Vs, V-Sports and high-tech features, just what Caddy has been doing for the last decade, stay the course.
I say let the new execs prove themselves. If GM is serious about the future of Cadillac, they’ll have to prove it by continuing on their path to better distinguish the brand from the rest of the corporate GM offerings! Regardless of who’s in charge, there needs to be a passion to deliver excellence! Now they can demonstrate this by going above and beyond what they’re currently doing, or by reverting to practices of the past, and we all know where that ended up!
We make a big deal about platforms, suspensions, powertrains, interior materials, etc., because these are the areas the competition is currently specializing in! It shouldn’t matter what GM uses to build their products, as long as the focus, energy and investment is on delivering a true luxury car experience! As long as Steve Carlisle and his gang realizes this, there’s no reason for failure! To my understanding, prior to Mr. Johan de Nysschen taking the lead at Cadillac, this idea of bettering the Cadillac brand began to cultivate, which led to the stellar Alpha/Omega platforms, the development of exclusive engines, etc. It’d be a crying shame to see all that progress go to waste in favor of quick sales! If the folks knew back then what Cadillac needed to be great again, I don’t see why that should end with the appointment of another GM executive! So I suppose GM has some understanding of what they need to do to make Cadillac great! All Mr. de Nysschen was to do was carry out a vision guys like Mark Ruess and others within the GM corporate ladder had from the time they decided to get serious about Cadillac! He failed in the short run, so it’s up to Mr. Carlisle to deliver!
imo Cadillac had a troubled past in some years ( quality ) but todays styling -quality- have made a complete turn , years were not so good with the Cimarron -, 4-6-8, Catera – Allante – leaky northstar engines, this is all in the past , and don’t say other brands ( foreign ) did not have there failures also . You never hear from a foreign car owner that they are having a problem or maintenance repairs are expensive , they are all brainwashed –all of our GM cars were driven over 100k and 2 almost 200k without a major problem . SPINOFF CADILLAC ====No
I’m curious Tom G, how many are all of our GM cars, and what were/are they. Also if you could just give a hint of what you consider a major problem. I GOT IT, maybe GM or Cadillac could take classes on HOW those foreign brands so successfully brainwash there owners so that they continuously buy those foreign cars with all the troubles and expensive repairs. Because it seems to be working ( all that brainwashing )
Build the aspirational cars that will re-establish the brand at the top of the luxury car hierarchy.
Cadillac isn’t going to gain any cachet putting all its resources into trendy copycat CUVs to satisfy China’s market demands. You build a luxury brand from the top and let the greatness trickle down. Any future turnaround will require Cadillac to first get over its US identity crisis. Marketing Yankee BMWs to coastal elites fed a lifelong steady diet of anti-Americanism hasn’t exactly panned out. GM must aim much higher. A new Cadillac flagship modeled confidently along the lines of El Miraj (or something equally momentous linked to Cadillac’s great heritage) with best in the world drivetrain, engineering and craftsmanship would go a long way towards righting Cadillac if not the world. GM definitely has the resources to pull this off but lacks the vision entirely.
yes all of our cars were GM , 17 OLDSMOBILES . major repairs i mean no engine or trans issues . we are now driving Buicks and looking at Cadillac. brainwashing is not coming from GM .it is from fake reports ( consumer reports) . we have owned some models where they will indicate poor ratings where we have experienced no condition at all . Back in the early 2000s GM produced a Vibe and Toyota a Matrix , same car different name — reports gave the matrix better ratings -they were both discontinued but the matrix sold better .
I would like to see Cadillac operate as an independent entity within GM.
Their crossovers need to be based on the same rear drive chassis as their sedans and coupes. The XT4 and XT5 are obviously going to be popular for a while, but that doesn’t mean they are contributing to the brand’s image.
Cadillacs needs to be on a Cadillac chassis.
Cadillac is to GM as Lexus is to Toyota, or Genesis is to Hyundai. The Idea of a spin off is downright stupid. In a time when foreign entities are merging to capitalize on economies of scale, why the hell would a restructuring brand want to be spun off as its own?
The only thing that Cadillacs engineers and executives needed is a little autonomy in order to be more competitive. However, even the idea of Keeping that 4.2TT V-8 for Cadillac alone was so dumb when it was suggested that Corvette would be a recommended recipient.
Just to demonstrate, even Audi’s 4.0TT V-8 is used in the Bentley vehicles. So why the hell can’t and engine that was first developed for Cadillac can’t be tune or detuned for other GM premium models to capitalized on research and development cost.
Cadillac has one of the worst reliability ratings , and resale values , in my opinion. This should tell you something about Cadillac’s stature with the buying public . Johan’s moving the ops to New York was a meaningless gesture as was the Dare to be Great ads . The ATS that is dead at the end of the year is a prime example of design disaster , here is a middie sized car with the interior of a compact car . This is and was an invisible car with little distinctiveness . Ford is betting on CUVs and SUVs in their future , GM better get on board as much as possible as cars are not what the public wants . How long did Cadillac sit with only the SRX or the Escalade in the choice market ?? Unreal , and I blame the fuddy duddy old shareholders for blissful ignorance , perhaps stupidity is a better choice of word . They pull the strings , don’t they ??
Fuel prices will keep going up and the federal government will continue to follow California’s environmental directives and there will come a time in the not too distant future when SUVs and giant luxury pickups will be as popular as used tampons. When that day comes – and it will – car companies that stopped making cars will be hosed. Very shortsighted thinking at Ford.
Towering, bloated hatchbacks and wagons (aka CUVs) will fall out of favor before too long, Americans being the fickle bunch they are, and the sooner they go the way of rust and avocado colored kitchen appliances the better.
Why not selling Cadillac to PSA?
PSA does not have a real luxury brand in their portfolio.
And those at the Opel technical development center know those US cars, and can develop them further…
:-))
While GM/Cadillac is trying to decide what to do start here.
1. Honor the warranty. Cannot duplicate, no code, functions as designed is to be removed from the excuse manual. Customers don’t get their kicks hanging in the service department listening to lies.
2. Stop the nickel and dime philosophy that sends current and potential Cadillac customers to the competition. Losing business over a silly heated steering wheel is unforgivable.
http://www.cadillacforums.com/forums/cadillac-xt5-first-generation-forum-2017/1050570-some-observations-our-search-replace-our.html
I appreciate that posters on GMA have strong feeling about what Cadillac is/was/should be. In the real world the Cadillac customer decides to buy or go elsewhere.
There is no excuse for losing repeat business due to silly things or taillight warranties.
Hey guys April Fools was a few weeks ago! This is about the stupidest suggestion I’ve ever heard!
Spinning off Cadillac is like someone planning suicide attempts in spite of the better quality of life that person had achieve and worked hard for.
Although GM is short-sighted, GM is committed to Cadillac but not favorable for as offering incentives and discounts by dealers. Cadillac along with GM’s big SUVs and trucks are true profit generators for them.
There is no way GM will spin-off Cadillac. Cadillac has a financial arm under GM. GM’s problem is their shortsightedness and they need long term vision for the brand in order for it to be successful and have the buying public look at Cadillac as a default luxury of choice back in the day like Escalade is currently.
Cadillacs will continue to strive and advance with each generation model if you compare the CTS and Escalade currently to the previous generation models as examples. Cadillac have came a long way since the ’90s and early ’00s. I have confidence that Cadillac will be fine under GM. In spite of the improvements to future Cadillacs, it is up to GM if they want short term or long term success for Cadillac for as image is concerned.
I agree Cadillac needs to distinguish itself from the other GM divisions. The product truly needs to be special. Can’t have a XT5 that’s basically the same crossover sold by GMC, Chevy, and Buick.
If I were CEO I would make Cadillac a niche division with high end products emphasizing high performance and high luxury. Volumes would be lower with higher prices, but with style and features that could compete with Range Rover, Jaguar, Porsche, etc. I would have exclusively rear/AWD chassis’ that could be flexible for both cars and crossovers. I think only 2 sizes of flexible chassis could handle the entire product range to get some economies of scale. Entry level performance would be at least equivalent to V-sport and going up from there. All twin turbo 6 and 8’s. 400hp V6, 500+hp V8, ultra high-perf hybrids
My lineup might be:
Mid size AWD sedan (think CTS Vsport, V)
Large AWD sedan flagship (think A8, S8)
Small, medium, large AWD crossovers (think Jag f-pace, Porsche Cayenne, Range Rover)
Mid engine supercar (keep Corvette front engine)
Maybe an entry level smaller coupe/convertible like M3, S4, but still with at least v6 twin turbo
And give the vehicles real names. If you must have alpha numeric combine like perhaps Escalade XT7 or Escala CT6.
I would keep Cadillac but it must distinguish itself from the other GM divisions. The product truly needs to be special. Can’t have a XT5 that’s basically the same crossover sold by GMC, Chevy, and Buick.
If I were CEO I would make Cadillac a niche division with high end products emphasizing high performance and high luxury. Volumes would be lower with higher prices, but with style and features that could compete with Range Rover, Jaguar, Porsche, etc. I would have exclusively rear/AWD chassis’ that could be flexible for both cars and crossovers. I think only 2 sizes of flexible chassis could handle the entire product range to get some economies of scale. Entry level performance would be at least equivalent to V-sport and going up from there. All twin turbo 6 and 8’s. 400hp V6, 500+hp V8, ultra high-perf hybrids
My lineup might be:
Mid size AWD sedan (think CTS Vsport, V)
Large AWD sedan flagship (think A8, S8)
Small, medium, large AWD crossovers (think Jag f-pace, Porsche Cayenne, Range Rover)
Mid engine supercar (keep Corvette front engine)
Maybe an entry level smaller coupe/convertible like M3, S4, but still with at least v6 twin turbo
And give the vehicles real names. If you must have alpha numeric combine like perhaps Escalade XT7 or Escala CT6.
As a millennial Cadillac owner (ATS 2.0) & former Cadillac die hard I’m very conflicted. All of my friends own MB, BW and Audi’s and I’ve always defended Cadillacs because I knew a lot of the criticism was based on uninformed biases, but to be frank there are major problems with the quality of the brand. Recently my CUE system has stop responding to touch ( which will cost me 2 grand+ to fix) , i’ve never been in an accident but I’ve noticed body panel gaps have become much larger over time, my transmission shifts much rougher than when I purchased the car despite constant maintenance, my moon roof sometimes gets stuck etc. Other design choices such as lack of folding mirrors & lack of refresh kind of piss me off because I have no problem paying more for MORE. But I have to go to another brand to get those things.The direction JDN was going in gave me hope but i’ve really seen no change in the brand direction in 3 years i’ve owned the car. Most of my friends still think I’m a fool for buying a Cadillac, and the issues I’ve encountered seem to confirm that.
I don’t know if a full separation is the best thing, but I can confirm that being that close to GM seems to have limited the brand. I will most likely skip Cadillac next year for my next car, but hopefully by the time I’m ready for another purchase in 4-5 years the brand will be in a better state