Cadillac Heads Back to Detroit

The tail section of an Eldorado Seville.

General Motors Co. is moving its Cadillac headquarters back to Detroit, nearly four years after relocating the luxury brand's home base to New York City's SoHo neighborhood. Steve Carlisle, a longtime GM executive who took over Cadillac in April, confirmed the move, saying he wants the brand's leaders to be closer to GM's vehicle design and engineering hub in suburban Detroit, especially as GM prepares to roll out several new Cadillac models in coming years.
 “We have a huge number of launches ahead of us,” Mr. Carlisle said in an interview.
 “We've got to think about how we take inefficiencies out of the communication process between the Cadillac team and the GM partners.”
 The return to Detroit walks back a move initiated under former Cadillac head Johan de Nysschen to give the 116-yearold premium brand more autonomy from GM's Detroit headquarters and to help Cadillac's employees better understand what makes luxury buyers tick. About 110 people work at Cadillac's Manhattan headquarters, mostly executives and marketing personnel.
 Mr. de Nysschen was pushed out in April after nearly four years leading Cadillac. The former head of Volkswagen AG's Audi of America at times clashed with GM executives in Detroit over strategy and control, people familiar with the matter said. Cadillac's U.S. sales also slumped under Mr. de Nysschen despite big gains in China.
 While the original move to New York was intended to create separation from the rest of GM, Cadillac still relies on thousands of employees in Michigan to decide on everything from a model's styling and features to how cars are priced.
 The planned move is the latest twist in GM's long struggle to revitalize the image of an American product once synonymous with high end luxury but that has since been passed by foreign brands, such as BMW and Volkswagen's Audi.
 GM executives had believed the New York location would set Cadillac apart from the day-to-day operations of GM's mainstream U.S. brands: Chevrolet, Buick and GMC. The idea, first floated in late 2013, was backed by then-GM Chief Executive Dan Akerson and some GM directors, who worried that Cadillac's worldview from Detroit was too myopic for a brand with global aspirations, people familiar with their thinking said.
 The relocation had been controversial, criticized by Detroit civic and business leaders and questioned by some industry pundits.
 The decision to leave New York marks the first major move by Mr. Carlisle, who previously ran GM's Canada business. He said Cadillac's new headquarters will be in a renovated space in the Detroit suburb of Warren, Mich., near GM's technical center where employees work on vehicle design and engineering.
 Mr. Carlisle said Cadillac's time in New York helped attract new talent and gave the brand a fresh perspective. He said Cadillac is entering an “acceleration” phase in which the focus is more on new vehicles, rather than the brand building efforts of recent years.
 Mr. de Nysschen embraced Cadillac's SoHo locale as a way to recruit new employees, hiring away some people from Daimler AG's Mercedes-Benz and even non-automotive luxury brands, such as luxurygoods maker LVMH Moët Hennessy Louis Vuitton. Hanging Cadillac's shingle in New York also was intended to immerse its marketers in a trendsetting global hub of luxury commerce.
 “There is no city in the world where the inhabitants are more immersed in a premium lifestyle than in New York,” Mr. de Nysschen told The Wall Street Journal in 2014. Cadillac's marketing direction in recent years reflected its New York address.
 Recent advertising campaigns featured Cadillacs cruising through Manhattan cityscapes. The brand sponsored fashion shows in the city and hosted several rotating art exhibits at its Cadillac House retail lounge on the street level of its headquarters building.
 GM will keep the space open after Cadillac relocates. But Cadillac's U.S. sales continue to slip despite efforts to reposition the brand. It lost market share in each of the last three years, although it has commanded sharply higher transaction prices. Part of the problem is a thin vehicle lineup relative to BMW AG, Audi and other luxury players.
 This summer, GM Chief Executive Mary Barra also changed Cadillac's reporting line to Detroit. Mr. Carlisle now reports to GM product chief Mark Reuss, a Michigan native and avid Detroit booster. Previously, Mr. Carlisle reported to GM President Dan Ammann, a former Morgan Stanley investment banker who is spending more time on GM's autonomous-vehicle efforts.
 Cadillac also installed a new chief marketing officer in March, bringing in former McDonald's Corp. executive Deborah Wahl to succeed Uwe Ellinghaus, a former BMW executive who left for personal reasons late last year.
 Some analysts had backed the initial move to New York as a signal that GM was laying the foundation for Cadillac as a stand-alone company at a time when investors have shown an appetite for luxury car brands such as Italy's Ferrari NV and Aston Martin, which is planning stock-market listing that values the British sports-car maker at $6.7 billion.
 “We continue to see Cadillac as a distinct and highly valuable business that can increasingly justify an independent existence potentially outside” of GM, Morgan Stanley analyst Adam Jonas wrote in recent research note. He added that GM's move to set up Cadillac as a New York based business “could be interpreted as vital for transforming the brand.”

 GM's headquarters in Detroit before the company moved to another downtown location. The brand's new base will be outside the city near the car maker's technical center.

An Also-Ran
GM's Cadillac has trailed rival luxury-car brands for years.

Source: Autodata


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