Can Cadillac get there from here?

By Peter M. De Lorenzo

Detroit. After driving the new Cadillac XTS for a week (see our review in “On The Table” – WG) I found myself thinking about Cadillac - the brand - and wondering what was next for GM’s luxury division. Most people within and outside this industry who concern themselves with such things are aware of Cadillac’s journey by now. GM’s luxury show pony during its late-50s-early-70s heyday, Cadillac started to lose its way in the mid-70s, just as the German road stars from Mercedes and BMW started to make a serious run at the U.S. market.

And what did GM and Cadillac do to respond to that challenge? They got greedy with the brand, adding dealers and pumping up the volume to the point where any specialness left – admittedly slim at that point – was buried in 10-foot-high Day-Glo “SALE” lettering on their dealerships’ showroom windows. Dealers got fat and happy as profits rolled in, but the looming train wreck that would be brought on by out-of-touch products was just around the corner.

Added to that burgeoning nightmare was GM’s response at the time to the German luxury import incursion, the ill-fated and deservedly maligned Cimarron, a gussied-up Chevy Cavalier with Cadillac styling cues that laid such an egg in the market that it almost killed the division’s brand image for good.

But enough of that. That was then and this is now. Fourteen years into a calculated reinvention/rejuvenation, which involved embracing the German luxury car idiom note-for-note with a little American swagger thrown in for good measure, Cadillac is on the upswing. Newly impressive products, including the all-new ATS, the aforementioned XTS and with another all-new CTS on the way, have the brand firing on all cylinders again. These new models are noteworthy and to a large degree either approaching being dead-nuts competitive with select Audi, BMW, Lexus and Mercedes models, or getting there, as in close.

With that said, however, where does Cadillac go from here? Is it really going to pursue the German automakers to the very end, or is it going to redirect slightly and embrace and project an American design point of view, taking historical lessons from the dominant Harley Earl–Bill Mitchell GM Styling era and translating them into today’s cars?

I think it’s pretty obvious that the latter has taken hold of Ed Welburn and his GM design troops. The new Cadillac models are crisply rendered and boast a distinctly American design flair. And it’s working. It has taken a decade and a half, but with each new model Cadillac’s design language becomes more a part of the American landscape. The look is contemporary, yes, but even more important is that Cadillac isn’t following anybody when it comes to its design aesthetic, its designers having carved out a distinct point of view that will burnish its brand image going forward.

But what about that brand image?

Cadillac lives in a strange retail landscape where its “traditional” buyers – the ones with the money – are rapidly fading to black, as in dying off. And as much as Cadillac marketers want to cling to these buyers as long as they possibly can, it’s readily apparent that their future lies in engaging a totally new buyer, one with a completely different mindset already heavily influenced by the impact of the luxury European brands in this market.

The recent television advertising campaign for the ATS, which flaunted a globetrotting, go-for-it perspective, is exactly what I’m talking about. Aimed squarely at buyers who wouldn’t even think of considering an American car, let alone a Cadillac, it at least moved the needle in the right direction for the brand.

Interestingly enough, there was much internal hand-wringing over these spots after the fact. Certain execs inside GM chafed at the cost and vowed that the “episode” wouldn’t be repeated (a residual legacy from the Joel Ewanick era, with GM marketers consumed by the idea that anything the former CMO touched had to be purged from the company. Juvenile and ludicrous, but we are talking about a Detroit car company after all).

Which, when you really dissect it, is patently absurd. Cadillac marketers need to orchestrate high-concept spots like that for Cadillac every year, because that’s the only way they’re going to accomplish a shift in consideration for the brand.

Look at Audi. Perpetually riding the coattails of BMW and Mercedes, Audi brand overlords set about repositioning the German luxury make fifteen years ago. They believed that Audi belonged at the head table and they vowed that they would get it there by establishing a positioning of technical superiority. How? By winning at the 24 Hours of Le Mans – the world’s most prestigious endurance race - which they’ve done eleven times in the past thirteen years.

Has it worked? Well, I should say so. Audi not only has bludgeoned the competition at Le Mans, it has raised its product game considerably at the same time and is not only at the head table, it is now considered by many in the industry as being ahead of BMW and Mercedes.

If I’ve said it once I’ve said it a thousand times in this column, but it takes a focused consistency over time to accomplish what Audi has done. And it’s within this context that GM and Cadillac marketing overlords have to consider their next moves as well.

The reality is that Cadillac needs to completely walk way from its established customers - which I define as anyone who came to the brand before the first-generation CTS made its debut – in terms of marketing. The people out there in ConsumerVille who have lingering positive feelings for the brand will still show up, but it’s the new customer to the brand that Cadillac must attract and aim all its marketing efforts toward.

Back to Audi. The brand has spent upwards of $100 million on its racing program every year. That’s over and above its considerable marketing and advertising spending. And GM marketers should be prepared to spend at least that much on advertising if they want Cadillac to be considered anything but one of two American luxury brands playing at the periphery of The Game.

I listen to the pronouncements from GM and Cadillac marketers and it’s clear that they not only think they belong in The Game, they actually believe they're going to succeed. That’s laudable because after all, everyone should have a plan and a goal. But they’re not there yet, not by a long shot. And the more they talk the worse it actually gets, because they’re not fooling anyone.

Yes, the Cadillac product portfolio is growing more impressive with each new model but as we discuss in our comments on the XTS, they still stumble with the fundamental details. And that is just flat-out unacceptable.

But the real issue is that I don’t believe GM as a company has the guts to really crank up the spending machine and properly nurture the Cadillac brand in a way that would get them even close to the head table.

Certainly not as long as CEO Dan Akerson is involved. Akerson, the scowling, churlish Captain Queeg-like Private Equity refugee who runs roughshod over everyone and everything in his path on his way to becoming The Savior for General Motors – in his own mind, at any rate – is a shortsighted fool who thinks he can cost-cut GM to prosperity and get out from under the “Government Motors” tag in one fell swoop.

As anyone in this business knows, it doesn’t work that way. But then again there’s no reason to believe that Akerson would even begin to grasp that concept anyway. When you’re an “Accidental Tourist” of a CEO who was handed GM on a platter, like he is, one devoid of even a shred of relevant experience or the foggiest of instincts as to what this business is all about, fundamental concepts are irrelevant.

Besides, Akerson thinks the entire automobile business was a joke before he arrived and he has zero respect for his own people, or anyone who came before him in the business for that matter, so how the hell can we expect the GM brain trust to develop a consistently focused plan for Cadillac? Especially one that involves vast expenditures of major-league, image-wrangling money each and every year?

I’ll have more on Akerson’s Reign of Tyranny and GM next week. In the meantime, credit the True Believers at GM in Design, Engineering and Product Development who have gotten Cadillac this far. At least they’re on the road pointing in the right direction.

Can Cadillac get there from here? 

It’s still a giant “we’ll see.”

And that’s the High-Octane Truth for this week.