GM CEO: Cadillac HQ move will be judged over time

Melissa Burden and David Shepardson
The Detroit News

General Motors Co. CEO Mary Barra said reaction was overblown to GM’s recent announcement that Cadillac would relocate its headquarters early next year to New York City, and that GM is committed to Detroit and Michigan.

“No one should question our commitment to this city and to the state of Michigan,” Barra said in a meeting with The Detroit News. “This is our home.”

GM has invested $5 billion in Michigan alone since 2009, Barra said.

Barra reiterated that GM wants to build Cadillac into a global luxury brand. And to win sales on the coasts, Cadillac needs to immerse itself in a luxury space and understand the mindset of luxury customers. She said Cadillac has a “long way to go” and GM is committed to investing in the brand, which is seeing huge growth in China.

Barra said GM needs to work to create value for Cadillac buyers. She said the problem now with the brand on the coasts is: “You buy a Cadillac and you may still have to explain.”

Some have criticized GM’s decision to move about 30 people to New York City in an office that will house about 120 workers. Barra said Cadillac President Johan de Nysschen knows the luxury business and the success of the Cadillac move will be measured over time.

“We have a plan, we’re going to execute it,” Barra said. “Three years, five years, ten years, you’ll know by the success of Cadillac if it was a good decision or not.”

Dealer supply of some Cadillac sedans is high, and Barra said that is a short-term issue that the company has to address. She said GM will remain disciplined in its strategy of matching supply with market demand, a strategy that helped to improve average sales prices, but she would not comment on whether GM would cut production or eliminate a shift.

“These are people’s jobs and lives that we’re talking about,” she said, adding it is too early to be making those kind of calls.

This summer, GM idled production for three weeks at the Lansing Grand River Assembly Plant to trim inventories of the Cadillac ATS and CTS.

Heading into next year’s contract talks with the UAW, Barra said she has met several times with UAW President Dennis Williams and UAW Vice President Cindy Estrada, who leads the UAW’s GM department.

“I have a huge respect for both individuals and we’re building that relationship,” Barra said.

Barra would not comment on a wage increase for hourly workers in the 2015 contract, which is among UAW wish list items, and also would not comment on what particulars GM seeks in next year’s contract talks.

“I think what we demonstrated in the past is there’s a lot we can accomplish when we problem solve together and each understand each other’s issues,” she said. “And that’s the spirit in which I think we’ll approach next year’s negotiations.”

(313) 222-2319