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Forbes: Cadillac Doesn't Need A New Brand, Just A Strong Brand


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Cadillac executives will be in full throat this week touting the global debut of their fast, powerful new Cadillac CTS-V supercar at the Detroit auto show. But that unveiling won’t do much to help them in lower reaches of the CTS lineup, where General Motors just cut the sticker prices on some models after dealers and customers complained the pricing was too high. Luxury customers just weren’t feeling it for Cadillac, though CTS is a great car.

Read more: http://www.forbes.com/sites/dalebuss/2015/01/11/cadillac-doesnt-need-a-new-brand-just-a-strong-brand/

Bruce

2023 Cadillac CT4-V Blackwing

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The new advertising has begun. I recently saw a TV ad that featured a great classic rock tune in what was basically a very short art music video that ended with several seconds of attention to a CTS.

Historically, it seems to me that marques taking large chucks of market share do so slowly, beginning with establishing a solid base just under the pricing of the segment, then grow upward in price in the good times, but retrench only slightly in the bad times.

Not being a scholar of such things, I don't have any feel for dealing with the current situation, e.g. resuming a larger market share that has been relinquished for a considerable time. In this case, this is 30 years or more - an entire generation of customers.

I do know that GM/Ford/Chrysler fell off the horse slowly, in the 1970's and 1980's, by reverting to selling vehicles as commodities. Platforms shrank to one for each size, shared among all GM marques, a trend that started with the 1959 models, when ride and quietness were the principal goals of chassis development. This was the era of the Cimarron (the painful epitome of badge marketing of commodity vehicles), the HT4100 which saw Cadillac going to Oldsmobile and Buick for engines for all of its larger models, and loss of separate engine development centers for the different marques. This basically flatlined Cadillac and other GM marques, with the slight exception of some slight signs of initiative in Chevrolet. This was reversed in the middle 1980's and resulted in the explosion in GM technology in the 1988-1995 time frame - but GM rested on its laurels for ten years after that, with the notable exception of the 2002 CTS, a late-arriving update to the Caterra. Then the crisis of 2008 came down, while they had production facilities - with appropriate burn rates - for production volumes of twice what they could sell or more.

Other factors were the increasing cost of labor, making US labor cost per car the highest in the world, and thus the least competitive. Much of that cost was in wildly lucrative pensions and other benefits and those liabilities are still with us. The Government "bailout" was not for GM, it was to save the UAW benefits, which would have been shelved in a bankruptcy (possibly to be re-enabled at more reasonable levels). Likewise the Government guarantees for Ford refinancing and for the Chrysler merger with Mercedes. So those liabilities are still with GM, Ford and Chrysler to some degree.

Another factor was the "designed to fail in 60,000 miles" FUD that started in the early 1970's at your local **** dealer. GM ignored this, with the major exception of a strong rumor in about 2000 that GM was about to discontinue Pontiac. GM has had discussions about trimming the number of models since the Depression and has floated press releases about it, with a lot of talk about it in the early 1950's, but there was no public talk about trimming marques in the 1990's. GM just let their marques overlap in price and people take their choice as they have done for decades. One morning sometime in 2000 (I believe; someone may have a better date), GM put a full-page ad in the Wall Street Journal in which they announced in no uncertain terms that this was a malicious rumor, and they pointed out that Pontiac sold more units yearly than all Japanese imports combined at that time.

There's always the patina of something imported. Just about anyone can come here and the people will give them a chance. Or two. Even the 1985 Yugo, built by a Fiat contractor and a reincarnation of the 1971-1983 Fiat 127, had some sales the second year.

Even in a recession, Hyundai has shown that once established in a low-price niche and with even a short reputation for quality, one can enter and do well in any segment.

In a different world, I would go after BMW with Pontiac and start matching Mercedes models with Buicks. Both Mercedes and BMW are one-marque brands and serve a variety of price ranges, something that is more difficult for Cadillac. But I do think that showing a Buick of Chevrolet or GMC (sport-utes and such!) comparing well against a BMW or Mercedes or Porsche or Lexus or Infiniti would be great. The best of Cadillac should rise above them all.

In this world, my thoughts here are those of a retired engineer, not an automotive industry specialist. I suggest that success falls to those who are not shy about having another model or two, or option or two. Adding a powertrain to a model as an option does not add a lot of cost to the parts chain if that powertrain is sold on another model. And, I would look at incentives two ways: Add or change models to reflect what the customer wants, and, separately, shoot at demographics where imports have major market share; don't try to do both with one model and trim, but *do* do both.

And, for every platform, offer a top-of-the-line that is the very best that can be built on that platform; don't be shy about another platform's star drivetrain or some such.

Cadillac, and to a lesser extent the rest of GM, do an excellent job of listening to their dealers and helping them succeed. Cadillac does a superior job of making Service a peaceful, positive experience. Sales has improved in their customer interface in the last few years. The techs have improved a great deal; the best are still the best and the worst are either gone, reformed, or re-educated. Parts has always been top-notch. I suggest that GM find a way to listen to the salesmen as well as the sales managers, the techs in the shop as well as the service managers and staff, in fact *everyone*,,, and if you want to *really* know what's going on at a dealership, ask a long-time receptionist or cashier.

And, share the love with the rest of the GM dealers.

CTS-V_LateralGs_6-2018_tiny.jpg
-- Click Here for CaddyInfo page on "How To" Read Your OBD Codes
-- Click Here for my personal page to download my OBD code list as an Excel file, plus other Cadillac data
-- See my CaddyInfo car blogs: 2011 CTS-V, 1997 ETC
Yes, I was Jims_97_ETC before I changed cars.

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As for Pontiac....I think you mean Oldsmobile.

As for pensions...kinda hard to have 5000 people show up...on time...working for free.

Also. None of the pensions would have disappeared...white or blue collar. They were insured by the US goverment. By law.

Your elected Congress...in 1974. Enacted the PBGC. So basically...if you had a pension plan with more than 50 or 100 people. You were...required by law...to purchase pension insurance from the US goverment and no one else.

http://www.pbgc.gov/

Often more to the story..

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I was thinking Pontiac going after BMW because of the performance "assignment" of that marque in recent years. Oldsmobile did not have an assigned market or image niche for a long time, but they could have been given one. Like building cars that out-did BMW for lots less cash, and a better driving and owner experience.

But BMW offers a vast price range under the same marque, some of them very good cars. Again, more than one GM marque is necessary to complete with makers like BMW or Mercedes that do that.

I'll let qualitative remarks about compensation pass because getting any focus for discussion will require a whole thread in itself. I do believe that the labor cost per car relative to competition, particularly imports, has been a big problem for GM since the late 1970's.

I didn't say the pensions would disappear. But a bankruptcy could end or re-negotiate pension funding obligations of the corporation.

CTS-V_LateralGs_6-2018_tiny.jpg
-- Click Here for CaddyInfo page on "How To" Read Your OBD Codes
-- Click Here for my personal page to download my OBD code list as an Excel file, plus other Cadillac data
-- See my CaddyInfo car blogs: 2011 CTS-V, 1997 ETC
Yes, I was Jims_97_ETC before I changed cars.

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