Moving Cadillac headquarters to New York City was a bold decision by CEO Johan de Nysschen, possibly the most daring of his entire career. To be sure, most people don’t associate the Big Apple with the freedom of personal automobile ownership.
While the move didn’t make everyone happy, the fact is it’s working beautifully so far.
Let’s face it: Cadillac as a brand has strayed far off course. It’s no longer the pinnacle of automotive luxury. There’s a reason why the phrase “the Cadillac of…” exists.
Back in the early 2000s, Cadillac had stagnated to the point it was the more geriatric of all brands. In a daring move to revitalize and freshen up, Cadillac launched a bold, geometric and aggressive design language. It was controversial, but it did save the brand from doom.
Changing the design language and emphasizing the opulence of the Escalade only did so much. Everyone compared Cadillac to “the Germans” and laughed. Something had to be done.
While Cadillac has been morphing the angry geometric designs into something a little more sophisticated, de Nysschen has recognized the need for a deeper change. He’s seen that to truly transform Cadillac and make it competitive with the best luxury brands, the culture must fundamentally change.
What better way to do that than moving the Cadillac headquarters?
The thing that’s been holding Cadillac back has been GM corporate culture. Basically, Cadillac had fallen into the GM trap of churning out clone vehicles. It was the same thing that watered down Saturn and Saab.
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Setting the Cadillac headquarters up in Soho has really shaken things up. Local leaders in Detroit, and even some in the global automotive industry, vocally opposed Cadillac going to the Big Apple. What they saw was a city where traffic congestion and a lack of parking options reign supreme.
What de Nysschen, and his boss, GM CEO Mary Barra, saw was the seat of high luxury in the United States. Soho is a hip urban area, nothing like Detroit.
With the shift, Cadillac pretty much hired a completely new staff for the NYC Cadillac headquarters. This uprooting has fundamentally changed how daily affairs go in the office, and influences everything from vehicle design to dealership relations. New talent from the luxury automotive industry, and other luxury industries such as fashion and hospitality, have been attracted since the relocation.
You might have heard of de Nysschen before. He was with Audi a while ago, then headed up Infiniti before getting scooped by GM to run Cadillac. The man is a born leader, and has a charisma many admire.
Even more important, de Nysschen isn’t afraid to make tough decisions. One of his early observations was to note how sedan-heavy Cadillac is, in a market that favors crossovers. He’s been promoting product development, with eight new models coming by 2020. Most of those are crossovers, filling in glaring lineup gaps. Expect to see the XT4, a small crossover, in 2018, kicking off the crossover onslaught.
De Nysschen’s fiery personality certainly isn’t all serious. The man is a performance nut, and that’s being displayed in some of the bonkers Cadillac V Series models. If you have a chance to drive the ATS V Series, sitting behind that steering wheel and feeling a connection with the beast is transformative.
Too often, leaders in the automotive industry these days focus on the short term. This could be a product of executives jumping ship and getting poached by competitors constantly, but de Nysschen doesn’t seem eager to go beyond Cadillac. He’s playing the long game with the storied luxury brand, saying that within the next 15 years it will once again be a dominant figure in the market.
As they say, the proof is in the pudding. There are plenty of ways to measure the success of de Nysschen and how his plan to move the Cadillac headquarters to New York City is affecting things.
The Detroit News reports that Cadillac’s revenue has increased in the past couple of years. Just in April, the average sales price of a Cadillac in the US was a smidge over $55,000, edging out competitors like BMW and even Lexus.
China, the largest automotive market in the world, has been good to Cadillac. During the first four months of 2017, they grew a whopping 92.5 percent. Compare that to a global sales increase of 31.6 percent during the same time, which isn’t too shabby.
Not everyone is excited about Cadillac’s sweeping changes. Some dealers are pushing back against Project Pinnacle, which restructures how Cadillac pays dealers. Under this new plan, dealerships land in one of five tiers. Most of the naysayers will likely end up in the lower tiers, which come with fewer incentives and rewards.
Project Pinnacle is supposed to encourage Cadillac dealers to up their game when it comes to the customer experience. It makes sense, since people dropping that much money on a special vehicle don’t want the same treatment as the guy buying a Chevy Spark.
Some think Project Pinnacle is designed to whittle down how many Cadillac dealers are in the US. That could be part of the plan. Some dealers obviously aren’t interested in matching the kind of experience shoppers get at Mercedes-Benz or Lexus showrooms, and that’s weighing Cadillac down.
Cadillac is changing, because it must. The global automotive market is becoming more competitive than ever, and mediocrity will not be rewarded. By mixing things up with this move, de Nysschen has already sparked the creative juices.
One example is the new BOOK service, which for $1,500 a month lets people use any Cadillac model. They can switch for a different model at any time, so the service provides flexibility if you need a large vehicle for one weekend, but want to drive something smaller the rest of the month. The service is going through a testing phase in New York City before it rolls out to other markets.
Before long, you might not entirely recognize Cadillac. At least it probably won’t go the same way as Saab and Saturn.
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