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It appears the Motor City will have one less motor soon, as General Motors has announced plans to move its Cadillac brand from Detroit to New York City. Although the move will not change the location of the technical and product development teams currently based in Michigan, and GM is not moving Cadillac’s manufacturing and assembly operations out of Detroit either, GM does plan to establish the Cadillac brand as a separate business unit and move its sales and marketing headquarters to New York next year.
Cadillac’s new (since August) president, Johan de Nysschen explained the move saying “We are very proud of our Detroit roots and heritage, and the majority of the Cadillac workforce will remain in Michigan, but there is no city in the world where the inhabitants are more immersed in a premium lifestyle than in New York. Establishing our new global headquarters in Soho (NYC) places Cadillac at the epicenter of sophisticated living. It allows our team to share experiences with premium-brand consumers and develop attitudes in common with our audience.”
As might be expected, not everyone is pleased with the news, especially as a struggling Detroit continues to try to hold on to all of the business it can. Although GM CEO Mary Barra said the move is “not about the image of Detroit” and added that the move is also not about the fact that both luxury brands BMW and Mercedes-Benz USA are already headquartered near New York, it does seem that the move is squarely aimed at GM’s plans to help Cadillac better compete with the other top luxury-car brands. A press release from GM explained that moving Cadillac’s global headquarters to New York and establishing the brand as a separate business unit in 2015 will “Enable it to pursue growing opportunities in the luxury automotive market with more focus and clarity.”
Despite good reviews and a strong product line, Cadillac has recently been losing sales and market share, and many have recognized that the brand needs some help competing in the luxury auto market. Sales have been down about 5 percent this year compared to just a year ago and with a new flagship car on the horizon, the stakes are high. The Cadillac Elmiraj concept car has been confirmed as the basis of the brand’s upcoming rear-drive, ultra-luxury model, and it will need some very good luck to outsell the established Mercedes-Benz S-class models it is aimed at. Hopefully, the move to New York will help GM turn Cadillac into a stronger player quickly and not delay the process instead.
Although a move to New York will not automatically guarantee a positive image change, Mark Reuss, the head of global product development, purchasing and supply chain for GM, said he supports the move because ”The brand really needs to be elevated” and that “It’s time for some fresh thinking.” CEO Mary Barra added more optimism when she said “I really think it’s going to really accelerate what we want to accomplish on Cadillac, we are committed to growing Cadillac globally and I think this is an important step.”
Although the headquarters’ move to New York City will likely involve fewer than 100 people compared to the 46,000 still employed by Cadillac in Michigan, the endeavor is still a gamble for the automaker and it will probably take several years to find out whether or not the move worked as intended.
