GM separates Cadillac, moves headquarters to NYC
General Motors is splitting off its Cadillac luxury brand as a "separate business unit" and relocating its headquarters from Detroit to the trendy SoHo area of New York City next year in a "strategic realignment."
Nissan Motor made a similar move with its Infiniti luxury brand in 2012, making it a separate unit with a new headquarters in Hong Kong. Ironically, it hired Cadillac's current president, Johan de Nysschen, away from Audi to run it.
De Nysschen had built Audi of America into one the fastest-growing luxury brands. He's been leading Cadillac since August, when he left Infiniti to became the brand's third leader in two years.
The new office will have about 100 employees — including about 30 expected to move from metro Detroit — and will focus mostly on sales and marketing, said GM spokesman Pat Morrissey. GM said there will be no change for technical and development teams, nor for manufacturing or assembly operations. It said the new headquarters will be a "multipurpose brand and event space in conjunction with modern loft offices located in the heart of a city renowned for establishing trends and setting standards for the global luxury market."
The move comes as Cadillac struggles with a loss of growth momentum — sales are down about 5% this year vs. the period a year ago — despite new car models. It also is developing a new flagship, a big, rear-drive model foretold by the Elmiraj concept car. The new model, Cadillac says, is meant to be the brand's version of the Mercedes-Benz S-Class.
GM said, "Creating a new Cadillac business unit enables it to pursue growing opportunities in the luxury automotive market with more focus and clarity."
One analyst is not so sure.
"Cadillac's product line is the strongest it's been in decades, yet the brand is losing sales and market share in today's hypercompetitive luxury market," veteran auto analyst Karl Brauer at Kelley Blue Book's KBB.com, says. "A move to New York may add status to its mailing address, but what's really needed is clearer direction in Cadillac's sales and marketing efforts. The new management team needs to find its footing and execute in these areas as quickly as possible. Hopefully the move doesn't delay this process."
De Nysschen had pushed for the change, apparently thinking the luxury brand's image-makers and sales planners will be more in touch with Cadillac's kind of people in super-fashionable SoHo than in Detroit. "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 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."