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General Motors
Co.
GM 0.54%
will relocate its Cadillac headquarters to Detroit, nearly four years after relocating the base of the luxury brand to New York's trendy SoHo.
Steve Carlisle, a long-time GM executive who took over Cadillac in April, confirmed the decision, saying in an interview that he wanted the brand's leaders to be closer to GM's design and engineering center in the suburbs of Detroit. new Cadillac models in the coming years.
"We have a lot of launches ahead of us," said Carlisle. "We need to think about how we are eliminating inefficiencies in the communication process between the Cadillac team and GM's partners."
The return to Detroit dates back to a move by former Cadillac president Johan de Nysschen to give the premium 116-year-old brand greater autonomy over GM's Detroit headquarters and help Cadillac employees. to better understand what motivates luxury buyers. About 110 people work at Cadillac's headquarters in Manhattan, primarily executives and marketing staff.
Mr de Nysschen was expelled in April after nearly four years at the head of Cadillac. The former head of
Volkswagen
AG
Audi of America has sometimes confronted GM leaders in Detroit about strategy and control, people close to the case said. Cadillac sales in the United States also fell under the leadership of Mr. de Nysschen, despite significant gains in China.
While the initial move to New York was meant to create a separation with the rest of GM, Cadillac still relies on thousands of Michigan employees to decide everything from the style and features of a model to the price of cars.
This decision is the latest in GM's long struggle to restore the image of an American brand, once synonymous with high-end luxury, but which has since been adopted by foreign competitors such as:
BMW
and Volkswagen Audi.
GM executives believed that the New York site would make Cadillac an independent company from the day-to-day operations of GM's major US brands: Chevrolet, Buick and GMC. The idea, launched in late 2013, was backed by GM GM Dan Akerson and some GM executives, worried that Detroit's Cadillac vision is too short-sighted for a brand with global aspirations.
The offshoring was controversial, criticized by the civic leaders and leaders of Detroit and challenged by some industry experts.
The decision to leave New York marks the first major decision by Carlisle, who previously led GM's operations in Canada. He added that Cadillac's headquarters would be located in a renovated suburban Detroit suburb in Warren, Michigan, near GM's technical center, where employees are working on vehicle design and engineering.
Mr. Carlisle said the time spent at Cadillac in New York has helped attract new talent and give the brand a new perspective. He said Cadillac is entering a phase of acceleration in which the focus is more on new vehicles, rather than brand building efforts in recent years.
Mr. de Nysschen has adopted the Cadillac Local SoHo as a way of recruiting new employees, hiring Mercedes-Benz employees from Daimler AG and even non-automotive luxury brands, such as the luxury goods manufacturer.
LVMH Moet Hennessy Louis Vuitton
.
The Hanging Cadillac shingle in New York was also intended to immerse its marketers in a global hub of luxury commerce.
"There is no city in the world where people are more immersed in an upscale lifestyle than New York," Nysschen told The Wall Street Journal in 2014. Cadillac's marketing direction these recent years reflects his New York address. Recent advertising campaigns have featured Cadillacs traveling through Manhattan's urban landscapes.
The brand has sponsored fashion shows in the city and has organized several rotating art exhibitions in its Cadillac House retail show at street level from its headquarters. GM will keep the space open after the Cadillac move.
But Cadillac sales in the United States continue to decline despite efforts to reposition the brand. It has lost market share in each of the last three years, even though transaction prices have risen sharply. The problem is partly due to a sparse range of vehicles compared to BMW AG, Audi and other luxury players.
This summer, GM GM Mary Barra also changed Cadillac's line of command for Detroit. Mr. Carlisle now reports to GM GM Mark Reuss, a Michigan native and Detroit enthusiast. Earlier, Carlisle reported to GM president Dan Ammann, a former Morgan Stanley investment banker who is spending more time on GM's autonomous drive efforts.
Cadillac also changed its marketing director in March by bringing the old
McDonalds
Corp.
Deborah Wahl, director, replaces Uwe Ellinghaus, a former BMW executive who left for personal reasons at the end of last year.
Some analysts had supported the initial move to New York as a signal that GM was laying the foundations for Cadillac as a stand-alone company at a time when investors were showing an appetite for luxury car brands such as the Italian Ferrari NV and Aston Martin, which plans a stock exchange listing that values the British automaker at $ 6.7 billion.
"We continue to view Cadillac as a distinct and valuable enterprise that can increasingly justify a potentially independent, independent existence," said Adam Jonas, an analyst at Morgan Stanley. He added that GM's decision to create Cadillac as a New York-based company "could be interpreted as essential to transforming the brand."
Write to Mike Colias at [email protected]
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