Cadillac moving headquarters to Warren
Cadillac is heading back home.
The General Motors Co. luxury brand is moving its headquarters to the former Campbell Ewald building in Warren, four years after it attempted an appeal to East Coast sensibilities with a move to New York City's trendy SoHo district.
The transition will begin over the next few months, with an official move-in date of April 1. GM will perform "some renovations" to transition the building from the Tech Center to Cadillac's headquarters, a GM spokesman said.
Cadillac moved to New York four years ago in search of a new start for a brand that was failing to appeal to a new generation of luxury buyers — and to create distance between GM's luxury marque and its mainstream siblings. But on the onset of an ambitious product launch schedule, Cadillac is shrinking that distance to put its team closer to the engineering and design hub at the Warren Technical Center.
GM bought the former Lowe Campbell Ewald headquarters on Van Dyke in Warren — in the shadow of the Tech Center — in 2014. It has housed various Tech Center workers since then.
The decision to move Cadillac to Warren over Detroit, which is enjoying renaissance cred nationwide, is a much-needed win for suburbs as big businesses move downtown.
"This is a particular shot to the arm for Warren because when Campbell Ewald left (in 2013), that left a lot of us with a sour feeling at the time," said Warren Mayor Jim Fouts. "Now Cadillac, the premiere car at GM, is coming back from New York — coming to Warren."
GM has long valued its Warren campus, so much so that former CEO Fritz Henderson once considered moving the company's headquarters there as a cost-cutting move during the Great Recession, according to Steven Rattner's book "Overhaul," an account of the Obama administration's bailout of GM.
More recently, the automaker announced a $1 billion investment in the Tech Center in 2015. The Tech Center is currently expanding its design space, and is investing $28 million in a new project at its battery lab in Warren that will bring new testing chambers and advanced equipment to its battery operations there.
Cadillac decided to moved New York in 2014 as part of a brand reinvention that was designed to separate Caddy from GM's more-mainstream Chevrolet, Buick and GMC brands. The decision to move was made just before auto industry veteran Johan de Nysschen was brought on to turn around GM's luxury brand.
But de Nysschen was ousted earlier this year after leadership was dissatisfied with the pace of Cadillac's turnaround. The brand had invested in sedans at a time when the market was turning to crossovers and SUVs, and it shows on the scoreboard. U.S. sales slipped 8 percent last year with 156,440 deliveries.
GM President Dan Ammann told Cadillac staff that the brand's headquarters would remain in New York in April the when de Nysschen was replaced by GM veteran Steve Carlisle. The decision to relocate came sometime after Carlisle took over, a GM spokesman said.
Cadillac will still operate with a level of autonomy that the other brands don't have, according to a GM spokesman, but a "leadership decision" was made to bring the Cadillac team closer to GM's design and engineering center.
For now Cadillac will keep its Cadillac House in SoHo for "events, concerts and collaborative partnerships until longer term brand plans are in place," the brand said in a statement.
But critics say it's time to abandon the New York experiment.
"Whatever perceived advantage there was to moving to New York was not realized," said Rebecca Lindland, an analyst for Cox Automotive. "They have not been good stewards of the brand, and I think by moving back to Detroit, and by embracing their roots, they can start rebuilding that foundation."
The move, first reported by the Wall Street Journal, comes as Cadillac gears up to begin a two-year product offensive that will see new product launches every six months through 2020.
"The move will place the Cadillac brand team closer to those responsible for the new Cadillacs, including design, engineering, purchasing and manufacturing, ensuring full integration of Cadillac’s global growth strategy," Cadillac said in the statement.
Of the 110 New York-based employees, 70 were hired in New York. All those employees will be given the opportunity to move to Warren, a GM spokesman said.
GM and Cadillac leaders wanted the employees who advertise and sell the brand's vehicles to be closer to the engineering and design process, particularly at this latest turning point.
Even after that two-year new product rollout, which will finally arm Cadillac with the SUVs and crossover it needs to compete in the cutthroat luxury segment, the plan is to keep GM's luxury brand in Warren.
"This is the only plan," the spokesman said.