GM should keep Cadillac in Detroit

Richard Florida

General Motors is moving Cadillac headquarters from Detroit to New York City. The move is driven at least in part by Cadillac’s new president, Johan de Nysschen, who came to the gig this past summer after stints with Infiniti and Audi. The move to Manhattan and away from gritty Detroit is an apparent attempt to boost the lagging brand’s status on a world scale, especially with upscale buyers in China, Asia and the Middle East.

“There is no city in the world where the inhabitants are more immersed in a premium lifestyle than in New York,” de Nysschen said in a statement. “It allows our team to share experiences with premium-brand consumers and develop attitudes in common with our audience.”

On behalf of Detroit: Ouch. As for de Nysschen’s logic — I’m not so sure about it.

It makes far more sense for Cadillac to hinge its remaking on the leading automotive and design cluster of Detroit, the city’s authenticity, and its burgeoning comeback.

The move from Detroit projects Cadillac as an inauthentic, footloose brand, uprooted from the city, history and people that built it. (In fact, Cadillac was named after the founder of Detroit).

Cadillac’s image problem has little to do with Detroit — it’s a product of bad management and its reputation as a stodgy, American-centric, old-school, gas guzzler.

Cadillac would be better off positioning itself as a comeback story of an American icon — alongside the city where it is based.

Detroit may well be the best part of Cadillac’s image. “Made in Detroit” is a substantial enough moniker that it has drawn companies like Shinola, the watch and bicycle maker, to locate there.

The company seems to think the move to New York will attract top business talent. GM CEO Mary Barra told reporters yesterday that the New York office would target “about 100 people that I think are really going to craft the strategy.”

But can Cadillac really compete for top management, marketing and strategy talent in New York, against the world’s leading corporations, financial institutions, consulting companies, media operations and high-flying startups?

Then there are the costs: Recruiting top talent to Manhattan will cost the company top dollar. And it may end up attracting the wrong kinds of people for the wrong reasons: those who move to New York to climb the corporate ladder instead of those interested in helping remake a historic, if challenged, auto company.

Moving Cadillac’s headquarters to gain the patina of Fifth Avenue luxury isn’t nearly enough to save it.

Hitching the company to the great automotive history and inspiring up-from-the-ashes narrative of Detroit just might.

Richard Florida is co-founder and editor at large of CityLab.com, where this piece ran originally.

Florida is a senior editor at the Atlantic.