It’s easy to dismiss General Motors’ decision to move Cadillac’s global business center from Detroit to New York City’s SoHo neighborhood as a gimmick and just the marketing equivalent of re-arranging the deck chairs on a sinking brand. But it is actually a move long overdue that should pay dividends.
Here are five reasons the idea is sound, especially for people who do not know how GM really works.
1. Cadillac hired veteran Johann de Nysschen to run Cadillac’s global business. A veteran of Audi and Infiniti brands, de Nysschen knows that the brands he led in the past found their voice only after they established greater independence from the mother ships. Especially at Audi, where de Nysschen spent more years, he was part of a group that sold the VW Group management in Germany on the fact that a premium/luxury brand owned and managed by a company that also markets mass brands must have product development and marketing that is, as much as possible, divorced from those mass brands. Decisions at Audi about the designs, product and marketing have been made for several years now with brand leaders putting the premium brand and its target audience first, rather than second to what is best for the mass brands and the premium brands as a collective.
2. This is not just a change of ZIP code for an ad agency. Cadillac is going to be its own business, with its own cost and profit center. No longer will designers and product development planners have to make a decision about a part or interior design piece based on what Chevrolet wants as well. The per-piece costs are Cadillac’s to manage. That will allow Cadillac to spec its design, electronic interfaces, interior material, etc., on its own, with design aesthetics credible enough to go head to head with BMW, Mercedes and Audi. Busting Cadillac out of GM, even without an IPO, is exactly how a private-equity firm would value the brand—they would see the hidden value of the business if only it were broken out of a company that mismanaged it.
3. Detroit is not the problem for Cadillac. GM headquarters in the Renaissance Center building is the problem. Having worked on the Cadillac business at an earlier stop in my career, there is a group-think — and at times a group-inertia — at GM that pervades the organization and saps the ideas and energy that can bubble up from smart people in the group. Agendas for meetings often put the merits of the idea second or third after arguing over whose budget it comes out of, or whose favorite vendor gets the business. Moving the core staff away from the RenCen — a bleak, soul-killing office space — to Manhattan should eliminate several GM lifers from day-to-day impact on day-to-day work of the brand. Detroit, for all the bad headlines, is becoming an energized place for creative Millennials, just the people Caddy hopes to reach from its new digs. But Cadillac probably needs to put 500 miles between the brand group and the RenCen in order to implement the best of those ideas that come from the younger folks.
4. Separating Cadillac’s whole business unit from Detroit to New York can have a sub-conscious impact on the media that cover Cadillac both as an automotive brand, as well as a lifestyle brand. The fact that the group is breaking out of the afore-mentioned Beige-a-Palooza corporate headquarters on the Detroit River in favor of the media and lifestyle marketing capital of the world is a symbolic move that will also deliver some operational benefits. That’s a real thing for traditional and social media practitioners whether or not they are admitting it this week on their blogs. My God, it could be that Cadillac actually has hipper, more inspiring office space than its ad agency!
5. Separating from GM headquarters may well give Cadillac a chance to do what it has needed to for the last decade: establish a voice and image for the brand that can withstand the pressure from within GM to change directions because of the latest sales numbers or marketing chief. GM has been doing well at recruiting some very talented marketers with solid track records from the outside: DyNysschen at Cadillac and Tim Mahoney at Chevrolet to name two. Both professionals know that consistency and authenticity is what makes a brand attractive and engaging. Brand images and strategies for cars are to be tweaked and refreshed, not changed wholesale on the whim of a marketing manager who was an engineer in Venezuela the previous month before he or she got promoted to brand marketing manger in the U.S. BMW has been selling “The Ultimate Driving Machine” since Nixon was in the White House. Cadillac has had four agency partners since Obama was sworn in, and even more strategies.
Distance from GM’s Renaissance Center is not a magic bullet. The brand team has to hatch a strategy and create a voice that the audience will appreciate. Moving out of Mom and Dad’s basement is a great first move toward finding that voice in a new century.