General Motors' Branding Fiasco Part Six – Cadillac Falls Down
There is no greater symbol of GM’s branding woes than Cadillac. During its formative years, the marque’s products stood at the pinnacle of automotive excellence. As The Grateful Dead would say, what a long strange trip it’s been: from coachbuilder to maharajahs to supplier of Chevrolet clones to America’s mid-market motorists. In a world of $30k Rolex watches and $500 wine, Cadillac no longer deserves to be called a luxury brand. Its failure epitomizes all that went wrong with GM’s branding.
Cadillac was formed from the ashes of the first Ford Motor Company. When Henry’s early backers asked Engineer Henry Leyland to appraise the failed business’ assets, the Vermont native convinced them to resume operations using his 10hp one-cylinder engine. In 1902, Cadillac was born.
Leyland applied his experience as a gun maker to spectacular effect. The company’s fanatical attention to parts quality and interchangeability created an extraordinarily reliable vehicle. When three model K Cadillacs aced a series of English reliability tests (including scrambling key components from three cars and then rebuilding them), Cadillac earned its reputation as the “Standard of the World.”
GM bought the innovative automaker in 1909. From the start of the century into the roaring twenties, Cadillac pushed the engineering envelope. The automaker introduced the first electric starter, safety glass, V8 power, synchronized transmission and more.
When Alfred Sloan reorganized GM according to his principle “a car for every pocketbook,” Cadillac occupied the top berth, above Buick. Sloan then pushed the brand into the auto-stratosphere.
Caddy’s 1930 portfolio included the LaSalle, V8, V12 and the V16 (fully the equal of the Rolls Royce, Duesenberg, Packard and other coach-built cars of the Classic era). Prices ranged from $3295 to $9700– roughly $80k to $300k in today’s money.
The Depression killed the V16, and almost took the brand with it. In 1932, GM contemplated shuttering the division. Cadillac’s president Nicholas Dreystadt presented an alternative: sell the brand’s less stratospherically-priced products to America’s nascent African American upper class.
Opening its doors to this neglected market saved Cadillac from oblivion, but subjected the brand to a new threat. As Sloan’s once-sacred pricing structure eroded, Cadillac’s top-of-the-pile price premium shrank. In 1940, the cheapest Cadillac was 150 percent more expensive than the most expensive Chevy. By 1950, it was 65 percent. By 1960, it was just 30 percent.
The fifties and early sixties were Cadillac’s second golden era. America’s income distribution was the most compressed it had ever been; a brashly styled Caddy was a commonly-shared icon representing the American dream.
While Caddy’s prices continued to fall in this era, their models were still a fantasy for the typical working-class family. Factory workers were known to pool resources to buy a Cadillac on a time-share basis.
During the ‘60’s, America experienced an explosive growth of Median Household Income (MHI). Cadillac chased the booming mid-market, losing touch with its rapidly fading luxury remit. In 1960, a basic Cadillac cost 87 percent of MHI; by 1970, it was down to 64 percent. In 1971, the Calais cost only 25 percent more than a Caprice.
GM singularly failed to do the right thing: take Cadillac back up-market to cater to the rapidly growing ranks of wealthy and near-wealthy, and enhance Buick and Oldsmobile to take Cadillac’s place in the lower-premium market.
Product wasn’t the problem. In a 1965 Car & Driver luxury car comparo, Cadillac finished a close second (just behind the three-times more expensive Mercedes 600) and handily beat Roll-Royce, Lincoln, Imperial and Jaguar.
C&D hit the nail on the head: “Among enthusiasts, the Cadillac is probably the most underrated car in the world, although in some ways, it equals or excels the Mercedes 600. In our estimation, Cadillac’s great sales success is all that hurts its ‘image’ as a prestige luxury car.”
Cadillac’s fit, finish and build quality went downhill from there, as the high-volume, low price strategy meant cheaper materials and rushed assembly. In 1964, nobody would have confused an Impala for a DeVille. By 1971, the Caprice and DeVille were precariously similar in both style and build quality.
GM’s destruction transformation of a globally-respected, technologically-superior luxury brand into a tarted-up Chevrolet for middle class buyers was complete.
America’s upper-income classes abandoned Cadillac for Mercedes, whose sales began a long expansive period around 1970. In 1973, Cadillac sales enjoyed a brief explosion (stealing from Chevrolet?). Sales exceeded 300k in 1973, peaking at 350k in 1978. And then Cadillac began its near-terminal decline.
Today’s Cadillacs have established a precarious foothold where Buick once lived: at the top end of the ‘near luxury’ automotive market. Talk of a new V16 to reposition Cadillac higher up in the food chain has faded, leaving the brand with the prospect of more mediocrity. Badge-engineered SUV’s, price-conscious sedans and an uncompetitive roadster portend a bleak future for Cadillac, and GM.
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At Tokyo and Shanghai when they wheel out a new car they surround it with a lot of hot chicks. Who the hell wants to see Lutz in suit? One of the reasons for GMs demise?
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