The big news of the week is the relocation of Cadillac HQ. What’s going on here? It’s not as bad as you think.
I get it. Cadillac is trying to reposition itself in the market. Cadillac is trying to reinvent itself, and so far, it’s done pretty well with competitive models like the CTS, ATS, Escalade, and the V-series line up. But moving Cadillac HQ from Detroit? Should they do it?
“We want to put a little bit of distance between Cadillac and the rest of the General Motors entity so that we can begin to put together a team that is able to give 100 percent mindshare to meeting the challenges of the premium market,” says Cadillac’s new president, Johan de Nysschen.
Cadillac and Detroit go hand-in-hand. Cadillac IS Detroit. Cadillac FOUNDED Detroit. In fact, when you visit the city, take a walk downtown. Exit the doors of the GM Ren Cen and take a left on Jefferson street. You’ll come to a nice open area on your left hand side as you walk close to the Detroit river – the water that separates the United States from Canada. That area is called Hart Plaza.
As you get closer to the water, you see a statue of a man, standing proudly. Standing tall, triumphant, and imposing. Who is this man? His name is Antoine Laumet de La Mothe, sieur de Cadillac.
He went on to found the fort in 1701 that would be the beginnings of the city of Detroit – the center of the American automobile industry.
But beyond all of that, moving Cadillac HQ is actually a fairly sound business decision. As de Nysschen says, New York City is “the epicenter for global trends.” A luxury division, even one with the history of Cadillac, should be on the forefront of style and sophistication. Have you been to Detroit lately? Trust me – that is not the image the city projects.
“I say to my team that we need to develop a set of behaviors that walks, talks, eats, sleeps, dreams premium — that’s all we do,” said de Nysschen.
The new building will be in the trendy Soho district of New York City. It will have loft offices and spaces for events, and GM is expecting the new Cadillac HQ to open in the second quarter of 2015. Some don’t think they should. Sales are in decline compared to 2013 thus far, so some industry analysts and fans of the brand aren’t so sure the move will pay off.
Cadillac has been using NYC to host some of its biggest events of the year. This leads us to believe that they had this in the plans long before de Nysschen arrived. The brand unveiled the 2015 Escalade flagship SUV in New York City last year. There’s an international auto show there every year, and rumor has it that they’re going to unveil their new premium “Omega” platform sedan, designed to compete with the S-class and 7-series there this year. If they’re revealing their two most important products there, clearly Cadillac wants to develop close ties with New York City and the East coast. I believe they are on the right track with this move.
Keep in mind that not ALL functions will move to NYC. Only about 120 people will work at the new location, with that number expected to grow with the brand. Design, R&D, and technical development will still remain in Michigan, close to mother GM. The new building may eventually house product planning and finance, though, as GM studies its options for the new Cadillac HQ.
Uwe Ellinghaus, Cadillac’s Global Chief Marketing Officer, supports the move and believes the NYC presence will help the brand. “We think we will benefit from being in a place at least with our marketing people that is a natural home of luxury, where you see all the outlets, all the trends going on in terms of events, and set up, showroom develop,” he says.
What do you think of Cadillac HQ? Should it stay or should it go? Time will tell if this move is wise, or if it will end up like the failed experiment where Ford moved Lincoln and Mercury to Southern California in the late 1990s.