Let’s start with the over-simplified version of the story, the one you’ve already seen everywhere from newspapers of record to second-tire automotive websites: Cadillac announced it would probably be an electric-only brand by 2030, which seems like a long time away until you think about where you were in 2010. Cadillac’s dealer reps then told the dealers they’d have to spend some serious money to become “electric ready” between now and then. As is often the case, the dealers were given an alternative: they could take a buyout of between $500K and a million dollars to relinquish their franchise and walk away.
This sort of thing happens more often than you’d think, but until now it’s usually been related to aesthetics or a particular sales/service capability. You’ve probably noticed that all Mercedes-Benz dealers look alike now, and that all VW dealers look alike now, that sort of thing. Changes like that are expensive, so the manufacturers usually offer some sort of buyout as an alternative. Usually the number of dealers who take the buyout is between one and zero. Are you aware of a single Benz shop that didn’t adopt the expensive new architecture? Me neither.
Read the full column on Hagerty.com:
"second-tire" or second-tier? Either works, actually. Also, in countries where French is spoken, they say "de temps en temps". Not that this detracted from your usual provocative point of view.
I don't really disagree with your post until the very bottom. Wasn't it the dealers who begged for badge engineered cars, like the FWD A-cars from years ago? Wasn't it the dealers who hosed people over nickel and dime warranty claims?
Granted not all of this applies to Cadillac dealers, but some of it may. Henry Ford often said if you asked the public what they wanted, they would have replied "a faster horse". I think Cadillac dealers may reply: Escalade, Escalade Brougham, Escalade Limited, Escalade Sport Coupe, etc. None of these things will result in a 21st Century Cadillac Fleetwood much less a Talisman.
As my retirement years are coming into focus, I'd love to have a Cadillac car. When my folks immigrated here from Germany in the 1950's, my father's first car was a 1953 Cadillac. I fear that I will never own a new Cadillac car, as by the time I can pay for one, they won't exist.
I'm not in the least arguing that at a minimum Cadillac's message and mission aren't muddled right now. I don't know how to feel about the upcoming electric revolution, either. It's gonna take somebody with a whole lot more smarts than me...
Maybe because I got in the car business far later, but I find it hard to believe dealers would like badge engineering as it makes the product harder to sell without financial incentives piled on. Nor do I imagine they'd ever have a problem with billing GM for warranty claims.
A very interesting article, and I know I am going off on a tangent here, but I didn’t realize car dealers were rolling in so much dough. I’m not questioning it, just a little surprised to hear it. I used to hear that the only thing that kept the dealers in business was the service department, and I, at least. never take my car to the dealer for service. It seems like once upon a time when I was a young man people used to tell me ‘you can make good money selling cars, at least when the economy is good.’ But it seems like these days, and at least for the last decade or so, car salesmen are barely scraping by. Most of them are very young, working their first real job, or else they are immigrants these days. Seems like another example of the ever widening chasm between the haves and the have-nots in this country. Some decade soon 90 percent of the population will no longer be able to afford to buy a new car. What are the dealers going to do then? Just wondering…..
The ATS-V with the six speed is popular with some twenty-something engineers I know. I've always had a place in my heart for the CTS-V with the manual, but rumours about reliability seem to always be about two steps behind. That coupled with my wife's preference that the family ride be a largish SUV keep me away from Cadillac, since my latest 4Runner is half Escalade money and I tend towards the "U" part of SUV at the end of the day. I guess all of this lends itself to my agreeing with the central point of this article, which is Cadillac (GM) doesn't understand their sales arm at all, and hasn't for the longest time. They claim to have car guys at the top, and the guys at the bottom are, but the people between upper management and Engineering, sure don't seem to be. For every gem that sneaks out, there sure seem to be a whole of ducks, er Cateras. LOL
MajorTomB, I agree with you - seems those leading Cadillac forget where they started and what they became, along the way forgetting all budgets are driven by the Sales side of the business. You start with sales goals based on previous years - talk to your loyal customer base and (with a Market-back approach) build what your customer's want. Used to be Cadillac was only focused on what Ford (Lincoln) and Chrysler were doing, then their target was BMW(?) with the CTS-V, etc. Now they state customers don't want cars, they want SUVs. Funny, Chrysler (and until recently Lincoln) is still making cars, along with BMW, Audi, Genesis, etc., so why not ask your loyal customers what they want and build it? Accounting Fundamentals.
I imagine that I am one of your biggest fans, and this is perhaps your best column since the David E. Davis obituary. Nice work that. Small typo correction: it is "de temps en temps."
Have to agree. As a kid I always thought I would someday own a Cadillac but today they are nothing I guess I’ll just have to keep dreaming about those beautiful 1962 Cadillacs
First of all, let me say that although I remember/appreciate and cherish the great Cadillacs of the '50-'70s, I've never aspired to own one. Having said that, whenever I saw one, I KNEW exactly what it was. As has been pointed out many times lately, Cadillac is foundering, flailing about, imitating, instead of innovating. In the words of a song; "Give The People What They Want", (The O'Jays-1975) and it would seem to me that weird, "electriq" sounding names on electric cars isn't it. The old school Escalade appears to be one of Cadillac's best sellers. We were teased with beautiful concept cars that fit Cadillac's heritage image, but instead were given a revolving circle of alphabet soup named cars that came and went just as quickly. The dealer image is under assault and will have to change (ever heard of the internet?) But then, what do I know? I'm just an old car nut, pre-coffee musing over things that are no longer even aimed at my demographic! 🙂
Was Jack Baruth hired from Car And Driver? I stopped reading Car
And Driver to get away from know-it-all journalists who think they are automotive experts. Trying to compare suicide rates between professions? This is Hagerty, not the Enquirer.
We have been GM dealers since 1963 and Cadillac since 1970 so if I say I've seen it all you can take it to the Cadillac Cimarron (remember that car) bank. In my opinion Cadillac is headed in the right direction with it's ace in the hole being Mary Barra who is GM's best CEO in my lifetime and second place isn't even close. GM's real challenge is lack of supply which continues to frustrate dealers and GM however I remain hopeful they will sort that out. I feel Cadillac quality is finally world class and their technology/innovation is up their with the very best. Yes, I'm positive about Cadillac's future but also understand why some small rural dealers chose to take the money and run. Is that short sighted? I personally think so but only time will tell. In the meantime I'm betting on Barra and her team.
Wow, I have to completely disagree with your opinion of Mary Barra. Besides all the mistakes shes made at Cadillac look at all the other bad decisions made under her watch.
The new Blazer, what an embarrassment, it could have been a best seller had they just listened to their customers. We don't need another soccer mom mobile as the sales have proven.
How about the fact you can't buy a short bed regular cab truck anymore? When you think classic trucks you can't not think of the Chevy swb regular cabs produced over the years. It proves that she doesn't care about the legacy of GM when she stopped producing the kind of vehicles that time has proved would be tomorrows classics.
How about the Camero? Yes it is fast and handles great but if you can't fit your crew in the back seat your really going to limit your customer base.
I could go on but I think it's been proven that this is the result when you let someone who doesn't have any passion for what their doing run a car company. She's not a car (guy).
A neighbor who is less of a car enthusiast than myself recently related his tale of woe regarding his Cadillac experience. He had a gorgeous all-black 2018 CT6 finishing a 3-year lease and went in to the Cadillac dealer where he originally picked it up to get another new 2021 CT6. The salesman told him they don’t make the CT6 anymore, but how about a nice CT5? After parking his CT6 next to the CT5 and comparing the interior room, trunk space, and overall aspects of the CT5, he left the dealer in his 3-year old CT6 unimpressed with the car Cadillac was attempting to sell him on. Cadillac seems to be a brand that has lost direction and is now losing formerly faithful buyers like my neighbor, who is now actually looking at an Audi A7, after many years behind the wheel of a Cadillac.
Cadillacs slippery slope started well before the 80ties. In the 70ties they sold the Calias in the DeVille line. It was a "cheap" Cadillac. You can't stay on top of the market with a value model. Unlike BMW and MB, GM has Buick (and had Oldsmobile) for that. You lead by brining change to the market that gets perfected and disseminated to the other divisions, and as a small volume portion of GM they had the ability to do just that. It has always been style and image over substance. The only exception seems to be the CTS-V, but they are cheaping the V badge now. Yes they did some innovation over the years but so many half baked ideas. Great example was the first Seville. Arguably the best looking Chevy Nova ever built! It sold really well but, seriously it could have been a game changer except they only did some small stuff like adding front end anti shake shocks and one big move to EFI. There was so much more that could have been done. Why didn't they lead with IRS, 4 wheel disc brakes, 16" wheels, aluminum head engines, rack and pinion steering, on and on? Even the Cimarron could have been a leader not a slapped together mishmash of tackiness. Flash no substance is their history since 1962. Story is the same today, the CT6 was as close as they got. Every drive the CT5 turbo 2.7? Right in line with their history, half baked, lots of power but so noisy and full of vibrations, it almost begs you to not drive it hard. Truly disappointing.
I don't pretend to know a lot about making cars but I believe that the factories will stop making things if they aren't selling so those cars you hate so much are selling or they would stop making them. Cadillac dealers fear one thing more than cars that they likely won't be able to sell to their elderly customer base that want to be able to get into the car and drive it to their second home in the sun belt from where they live up north without stopping. Dealers looked at an EV and thought no 3,000 mile oil changes, no exhaust to rot out, no $800 tune-up, just 5,000 mile tire rotation, 20,000 mile brake fluid changes (that no one gets), 30,000 mile cabin air filter, and 100,000 mile coolant change if they keep it that long. They figured out that no one in their right mind will pay a $5,000 DOC fee so while they might be able to sell cars, they would not be able to later screw customers in the service hole. These people could sell Ice to Eskimos and get them to pay an $1,100 DOC fee but they can't service that ice and that is a problem. Everyone knows dealers make money in service and dealers know EVs don't need a lot of service. I have a feeling that a lot of those dealers would have stayed if GM told them that as part of the buyout they could no longer work on Cadillacs that they sold in the past.
That's a lot of good points. In terms of sales, it's not about the act of selling cars that roll off the factory line, its about how much money you make selling those cars and if you can cover your ever-increasing costs. This is why Ford quit making sedans in the USA, it was way too hard to sell them without dumping money on the hoods in the form of incentives...and perhaps Cadillac has the same problem?
Great comment, but I'd like to disagree with you on a couple of points. The first point is that dealers are very good at "moving the metal" but raw sales figures don't tell you much about how the sale worked. In 1996 the Taurus outsold the Camry and the Accord. I was on the ground with Ford at the time and I'll tell you how we did it --- by selling $21,000 Tauruses for $15,200 while the $18,500 Camrys across the street sold for $18,500. The majority of Cadillac sedans are sold to rental fleets or DEEPLY discounted.
Secondly, I keep hearing about "EVs don't need service". Putting Tesla aside, the evidence suggests that electric cars from major manufacturers need nearly as much service as their gas counterparts --- PLUS there's the big payoff of a battery swap seven or eight years down the road. It's been a very long time since the powertrains of most vehicles were their most unreliable feature, and that's the only difference. An EV is not a toy with a battery and a few motors in it. Rather, it's a fully functional vehicle that exchanges an IC powerplant and transmission for batteries, regulators, motors, and cooling devices.
Well its a fact of life with both of the American luxury car makers that their products are gussied-up versions of their regular cars. Been to a Lincoln dealership? Want a fancy version of a Ford Escape? That's about where you are at. Want a large, V8 powered sedan? Ha. Caddy is doing the same thing. Personably, I like the smaller Cadillac sedans a lot more than the Escalade. I have never understood the appeal of that monstrosity. But then, I'm a sports car/sports sedan guy, so I guess maybe I am the new target audience for Caddies, while the old one may be going the way of the dodoes.
I'm a sports car guy, also, when I'm in my sports car. When I was in my Sedan de Ville it was because, "I like big boats I will not lie" (with apologies to Sir Mix-a-Lot.) There is something about a Land Zeppelin that will never go out of style for some of us, and it doesn't mean I can no longer enjoy a truck or a motorcycle.
“How our country could invent and build the B-29 with no trouble but cannot copy the Genesis G90 is a truly vexing question”
I’m sure they COULD replicate a G90 were there any financial incentive to do so, but there is not. Does anyone make any money selling D-class sedans unless they are Mercedes? Maybe BMW? Pretty sure Audi only does by spreading the same platform around a half-dozen models and various brands.
Well-written opinion. But there is one thing that didn't get mentioned: the reason GM is forcing this change from gas to EV is not profit-motivated, nor is it consumer-driven: it is blown in by the fetid political winds from Washington, which apparently is a fairy-land in which petroleum can be declared irrelevant by fiat, where sunshine powers everything from earthmovers to electric toothbrushes, and where physics, supply-and-demand and free-market innovation are increasingly concepts whose mere discussion screws up the countenance of the hearers just as much as would a sudden methane release in a crowded vertical lift. Until we figure out a way to keep people who produce nothing but policy and hot air from meddling in the private sector, the automobile industry won't be the last one to point their prow down this very hairpinned, very potholed road - with predictable results.
The drive toward EV is driven by the impact of fossil fuels on the environment. This isn't some personal vendetta against the private sector, even if the far left make it sound that way, and the far right scream that it is so. Much like the mask issue, the evidence of the problem and the solution is overwhelming, but some people are swayed by those shouting about their freedoms; their right to do whatever they want. The world needs to move away from fossil fuels. It's happening around the world whether you like it or not. Petroleum will never be completely gone, but doing nothing will not be an option over the next few decades - and the issue is more than just cars. As with most of these issues, American companies like GM should be leading the way, not following. They've ceded technology and design to others. GM doesn't drive technology and design because they haven't developed a clear roadmap. You can't win the race if you don't know where you are headed. Cadillac is the best example of this confusion. This isn't about giving the public what they want, it's about creating the best product. Did you know you wanted a iPhone in 2006? You probably do now. The US has developed most of the greatest technology the world has seen, but been left hamstrung by a perception that the public is too afraid to innovate. That's because too many loud voices start harping about their loss of status quo. The auto industry said that the push for fuel efficiency and regulated emissions in the 70's would kill the car industry. No horsepower, horrible problems ... Last I looked Dodge is currently selling a car that has 797 horsepower, meets the emissions goals, and still gets 19mpg on the highway. Current EV's are not perfect, but neither were the first 70's cars. Give the public what they want and China will show you what you want.
If electric cars are truly being pushed because of fossil fuel problems/effects, they should be outlawed as well, because they're no more green then a well-designed internal combustion car. I think it's fantastic that they are experimenting with electric cars, but I don't see them being at the point yet where they need to be selling them (and demanding/mandating/subsidizing them retail, since they are so severely limited compared to a well designed current hybrid.
My guess is many of the dealers will pick up another franchise (Kia, Hyundai, whatever) so they can continue to operate their used car lots. My dad was a Sales/General manager of auto dealerships for 40+ years (first Ford, then Buick, later Chrysler and Mercedes) and that is generally where the money is made, along with finance and insurance. Over the years, I heard many tales of the manufacturer forcing multiple undesirable models on the dealers in order to get each of the desirable ones. In 1969 I remember my dad trying to figure out how to sell a Torino Talladega, plain white, black bench seats 429 c.i., automatic in a Thunderbird/LTD market. Nobody knew what it was. Back in the '70s, most foreign car dealers in the mid-west were also American car dealerships so when Lincoln-Mercury began to see Mercedes as a direct competitor, they attempted to have his dealership drop the M-B franchise. Sold the Lincoln-Mercury franchise and never looked back. The son of the Dealer my dad worked for runs it today as Mercedes-Benz Audi. The Lincoln dealership is primarily a used car lot. That may be the future of electric Cadillac dealers.
A new car franchise is not a gold mine, Everything has a pat answer but nothing is simple. There are many reasons for anything. If you check, the bulk of the Cadillac dealers taking the buyout are multi-line dealers who don't rely just on Cadillac. The franchise is just plus business and this will kill its ROI. Example: as a friend in a small town relatively nearby found, when the OBD came out Chevrolet required him to buy a $10000 diagnostic machine which could be had elsewhere for much less but did not say Chevrolet on it. Pontiac also required him as did Buick to buy an identical machine for $10000 from each that had their respective decals. They also wanted him to build a new multi-million dollar facility and cancelled his franchise later when it became possible after the government bailout. Many dealers for GM and Chrylsr lost their franchises at that time because they balked when the guys in the ivory towers wanted them to spend a lot of money on some hairbrained "upgrade" of signage, corporate symbolism or gadgets. They disappeared or became import dealers.
GM spent most of the US taxpayer bailout money in China. Mary Bara, CEO since 2014 has said that is their future. But the bailout made GM and Chrysler quasi-government agencies. Before that you had to be Satan's little brother to lose a franchise but the new situation let them cut any dealers that did not or had not done their bidding.
You are right that Cadillac lost its way (as it did with the likes of Cimarron and Catera). It was a symbol of luxury and prestige. An awful lot of people (sadly for the auto enthusiast) buy a car or truck to be seen in. You want others to see you as you think you see yourself. That is why VW couldn't understand why people didn't buy the Phaeton. Because the buyers didn't want to spend $75000 when they weren't going to hear anyone say, " GEE, he's got a VW!". Admit it or not it's about "Look at me!".
Are Rolls-Royce cars really magnificently better driving or trouble-free? Not from my experience. But they have that sign on the back that says "Look at me, I've got a Rolls!"
If folks want a luxury car that is comfortable and trouble-free they buy an Avalon. But it doesnt have the cachet. Do most people drive their cars to the cars capabilities? My daughter has a car that can go 135 mph to drive around LA where rush hour traffic is more like 18 mph. Do buyers of Cadillacs buy because Cadillac is a high-performance race car? I don't think so. They buy roomy,comfortable and "Look at me-I've got a Cadillac." Something to strive for, not something that is "whazzat?" Actually the same for clothing, housing and location, and dogs- everything is image. They may say they appreciate it but deep down it is all about being seen as they visualize theselves.
In sum and there is still much more, Cadillac is faced with cities and states that are mandating electric vehicles in the future.Tesla has made an image of being cool and eco-snobbish while eco-friendly which is a good position.
To a dealer 200-grand may seem like a lot for a fancy extension cord. Hopefully an alternative will pop up where the cars aren't so expensive to buy and you can jump into it and drive more than 250-300 miles without then having to stop and
refuel for 30+ minutes.
And electricity costs will go up- the old supply and demand. Like I said, no simple answers to anything -including this diatribe.
Agreed, vey well written and informative.
I've been invited to the exclusive Cadillac on the hill private parties during Pebble and The Historics, they do have nice food and booze, but I have to agree, as a long time Cadillac owner and (1955, 1962 Series 75, a leased ATS <great handling little car, if a bit unddrpowered>) Cadillac has lost it's way...in fact it was one of the answers offered by those very lovely marketing ladies who walk around with tablets and ask marketing questions. Something like: How do you feel about Cadillac brand identity and or direction...(I forget)...my answer was ""what direction?" and sure enough it was the equivalent of answer "D". Im not kidding.
Think about that. The marketing people already put in an answer which corporate authorized.
This isn't news. For all the reasons Jack mentioned: Cadillac is a lost brand with an exquisite history...and One more thing Jack, you are right, Ask the dealers?
They did, and 1 in 5 gave the answer.
"Thirty-six years of engine problems from the “HT4100” to the Northstar to whatever’s going to happen with the Blackwing V-8."
It goes back even further, to the V8-6-4, a good idea but not ready for prime time. A company that made its bones on smooth riding luxury cars with smooth running engines sold something that wasn't very smooth at all. So many companies make displacement-on-demand engines these days, I wonder if the V8-6-4 could be made to run smoothly with modern engine controls.
I don't know if it would make more sense as a competitor for the Ridler Award at the Detroit Autotrama or as an official Cadillac concept, but somebody should take an Escalade chassis, lower it, and put a sedan body on it with the best elements of Cadillac's show cars over the past decade or so (which have been spectacular but GM refuses to build them). They'd probably get orders.
If Cadillac and Lincoln had actually built some of the concepts they've shown they might not be also rans in the luxury market.
Paraphrase Jack: "In 2008, GM got a very tidy bailout that was both financial and legal. The dealers? They got nothing. They were told to suffer through it. Which they did."
Not so Jack.
My conservative buddies raged when President Obama initiated "Cash for Clunkers" and incentified the Public to turn over their old car for a new efficient car; a tax subsidised socialist bail-out at retail. Inevitably the trade-ins were mostly wholesale appropriate, not used car material. The used part industry had to be satisfied with recycle profit. The dealers moved inventory and the states collected tax and license revenue. Bail-out indeed.
As for me, raised on Buicks and Pontiacs, I could not make the Cadillac leap. In 1983 we bought our second new car. I shopped used Devilles (at Cadillac dealers) to evaluate wear and durability; I was discouraged and the cars were not pleasing to my 30's taste, We bought a new Saab that served 270K miles. About that time my Father bought a 4cyl Cimarron, terrible car. In his mind he had moved-up, and bought a second with a V6. My wife and I moved on to Lexus, Acura, Infiniti and even a Jaguar. We would have bought another Saab, but GM ruined that for us.
Jack, thank you. It occurs to me that about 2010 (Obama term) incentives were initiated to encourage sales of electric cars and plug-in hybrids. As with CforC, both manufacturer and dealer benefited. Ironically, because of pricing, proximity and prejudice, the majority of those cars were purchased by persons that did not demand an incentive.
I worked in the field for an automaker in a dealer facing role. This particular automaker took its relationship with its dealers very seriously, most notably with the dealer groups. There were times that I suggested we rename our company "X dealer group motor company" because of the capitulation to them at times. You always have to remember who your real customers are, but at the same time still hold the leash of accountability. I recall a conversation with my boss where he asked me to give in on a contentious issue with a famously noisy DP "because they sell a lot of cars."
My response was, "What are they going to do? Stop selling cars?"
He agreed they wouldn't, but what that dealer would do was whip up a mob in the dealer council and back my boss into a corner, outnumbered.
As the proud owner of two Cadillacs--a 60 convertible and a 2018 ATS coupe--I am a faithful enthusiast of the brand but hardly blind to their many faults. The Bolt EV owned and admired by my son reinforces my belief that GM and Cadillac will not only prevail but prosper.
I'm still trying to figure out how a niche boutique insurance company managed to snag my two most reliable beat writers to anonymously toil on their blog? I may be stuck in a dry town of 3000 Mormons 20 miles from a border I cannot cross, but I do know why.