General Motors Co.'s Cadillac brand will open a headquarters in New York early next year, as it moves the global hub for its luxury brand away from Detroit.
The shift comes as Cadillac focuses on global growth and tries to establish a fresh identity in the luxury market. Currently, most of Cadillac's functions are part of the rest of GM, and its headquarters is at the Renaissance Center. Many Cadillac operations will stay at the GM Warren Tech Center.
"We want to put a little bit of distance between Cadillac and the rest of the General Motors entity so that we can begin to put together a team that is able to give 100 percent mindshare to meeting the challenges of the premium market," Cadillac President Johan de Nysschen told The Detroit News.
De Nysschen, who joined Cadillac more than a month ago from Infiniti Motor Co. Ltd., wants to expand Cadillac into new countries and segments, and appeal to younger buyers. He expects the new Soho office, which will include space for events and loft offices to open likely in second quarter 2015, with about 120 employees. That would include about 30 who work for Cadillac in southeast Michigan, mostly in marketing and sales. The rest will be new hires, he said.
GM executives, including CEO Mary Barra and President Dan Ammann, have given de Nysschen authority to move to New York and reorganize the way Cadillac runs and operates. Ammann, who was instrumental in bringing de Nysschen to Cadillac and is his boss, said in a statement that Cadillac's mission is to "reinstate the brand to a pre-eminent position among global luxury brands."
"We are creating Cadillac as a very clear division, with a very clearly defined boundary, and it will be far more self-sufficient and autonomous than what has been the case before," de Nysschen said. "We will not have the Cadillac business fragmented across all the functions that exist today. They'll be a cohesive team with consolidated leadership."
This is not the first time one of Detroit's Big Three has sought a new location as a means to jump-start a brand. In 1998, Ford Motor Co. announced it would move the headquarters for Lincoln and Mercury to trend-setting southern California. But that was short-lived. Ford in 2002 said it was moving Lincoln-Mercury headquarters back to Dearborn.
De Nysschen comes to Cadillac from luxury automakers that have separated their headquarters from parent companies: Audi's headquarters is in Ingolstadt, Germany, away from Volkswagen's base in Wolfsburg. Infiniti made its home in Hong Kong away from Nissan Motor Co. Ltd. in Japan.
He said if he tried to create a division for Cadillac in Detroit apart from the rest of GM, he worries nothing would change. Geographic separation "forces us to find new ways of doing things," de Nysschen said.
Cadillac, like Ford's Lincoln brand, is trying to establish credibility in a highly competitive luxury space dominated by German and Japanese brands.
Cadillac's new ATS and CTS have won awards. But the accolades have not brought buyers to showrooms. The brand's U.S. sales through August are down 4.7 percent, with the ATS and XTS each dropping more than 20 percent this year — even as luxury sales and the industry as a whole are up. Helped by huge growth in China, Cadillac sales across the world are up about 10 percent, year-to-date.
The sales slide follows a great 2013 for Cadillac, in which it was the fastest-growing luxury brand in the U.S.
As GM seeks to find traction for the brand, it has made several leadership changes, including four different heads of sales and service in just over a year. The head of global Cadillac, Bob Ferguson, early this year was tapped by GM management to deal with its recall crisis. In July, GM announced it was moving Ferguson to Washington to lead global public policy. A day later, GM named de Nysschen to the top job at Cadillac.
Cadillac employment in New York likely will double in about three years as it continues to grow, de Nysschen said. GM is studying whether to send Cadillac's product planning and finance functions to New York, or to keep those in Detroit. Design, research and development and other technical aspects will remain based in southeast Michigan, de Nysschen said.
Cadillac has fewer than 100 employees in Detroit and more than 100 in regional sales and service across the country and in other countries. GM has had headquarters for other brands in various cities before. For example, Buick was based in Flint and Oldsmobile in Lansing. Many company operations were consolidated in the late 1990s in Detroit after GM bought the Renaissance Center.
De Nysschen said being in New York, which he called the epicenter for global trends, will allow the team to build a focus solely on the brand and to better understand the "sophisticated lifestyle" of Cadillac's target customer base.
"I say to my team that we need to develop a set of behaviors that walks, talks, eats, sleeps, dreams premium — that's all we do," said de Nysschen, who said he has not decided yet if his base will be in New York or Detroit.
N.Y. presence will help
Cadillac Global Chief Marketing Officer Uwe Ellinghaus, a German who has worked for BMW and joined the brand this year after working for a luxury watchmaker, said Cadillac needs a clear focus on luxury — and having a presence in New York will help.
"We have different customers with different expectations. We have different competitors to all the GM brands," he said. "And we think we will benefit from being in a place at least with our marketing people that is a natural home of luxury, where you see all the outlets, all the trends going on in terms of events, and set up, showroom develop."
Ellinghaus has his sights on growing Cadillac on the coasts, including New York where he says not enough people have seen the ATS and CTS on the road. He said New York's vibe can spark ideas for creative campaigns. Cadillac introduced the Escalade there last fall.
He also wants to get more people into Cadillacs through a partnership with American Airlines, and with hotels that provide courtesy transportation and test drives of new Cadillacs. Cadillacs are on display at airports in Los Angeles, Miami and Dallas, and at New York's JFK.
Ellinghaus said the office in New York will help strengthen Cadillac's global aspirations.
"This is not we aren't proud of our heritage ...," he said. "We just think what strengthens Cadillac going global will also strengthen Detroit and Michigan and keep our factories busy. So we don't see this as a move or whatever, because we will not develop or manufacture cars in Manhattan. ...
"We will just have some additional offices close to all the three airports there that allow us also to build an international team of cosmopolitan people of all kinds of cultural backgrounds that are already either living in New York or are happy to come and work in New York."
Not all are happy with the choice of New York.
"Our state and our communities have been committed to General Motors and Cadillac, and we have been through a lot together. Thanks to those partnerships, GM is growing and has an exciting future," U.S. Sen. Debbie Stabenow, D-Lansing, said in a statement. "While I am disappointed to hear that any auto industry jobs are leaving Michigan, I am pleased that Cadillac will soon expand its strong manufacturing presence in Michigan, where it builds beautiful, cutting-edge vehicles."
Staff Writer David Shepardson contributed.
Cadillac executive changes
June 2012: Chase Hawkins, director of sales and service Cadillac's Northeast region, takes over as head of U.S. sales and service. He replaces Kurt McNeil, in the job since 2010.
October 2012: Bob Ferguson, a former telecommunications exec and GM's vice president for global public policy, becomes vice president of global Cadillac, a new position.
April 2013: Cadillac names Don Butler, its vice president of U.S. marketing for Cadillac, vice president of global Cadillac strategic development. It hires Steve Majoros, managing director of the Campbell Ewald ad agency, for a new position as director of global Cadillac marketing.
June 2013: GM names Andrew Smith, design director for company's Holden unit, executive director of global Cadillac, replacing Mark Adams, who held the job less than a year. Adams is shifted to a design job in Europe.
July 2013: Cadillac fires Hawkins because he violated a company policy. McNeil covers Hawkins' sales and service job temporarily.
August 2013: Butler resigns.
October 2013: Cadillac hires Bill Peffer, CEO of Nissan Motor Co. in Australia, as Cadillac's U.S. vice president of sales and service, replacing Hawkins.
November 2013: GM brings on Uwe Ellinghaus, a former BMW executive who was vice president of marketing and sales at Montblanc International, as its new chief marketing officer for global Cadillac.
June 2014: Peffer resigns and McNeil again takes on U.S. sales and service role for Cadillac, at least temporarily.
July 2014: GM names Ferguson, senior vice president of global Cadillac, the company's senior vice president of global public policy and names Johan de Nysschen, president of Infiniti Motor Co. Ltd., president of Cadillac.
Sept. 2014: Cadillac names James (Jim) Bunnell U.S. vice president of sales, effective Oct. 1.
Source: Detroit News
New Cadillacs coming
■Top-of-the-range Cadillac sedan
■Unspecified 2017 vehicle, in a new segment for Cadillac
Source: General Motors Co.