Never let brand management get in the way of making more than $10,000 per vehicle.
Cadillac will introduce a full-size sport/utility vehicle for the 1999 model year next fall. It will be based on the existing C/K full-size truck platform - not the new GMT800 foundation beneath the new full-size pickup trucks - and will be very comparable to the GMC Denali, which is scheduled to reach showrooms in February.
The growing legion of luxo-trucks conquering suburbia proved too juicy a temptation for the crested wreath crowd to resist. Sure, brand management purists might argue that Chevrolet and GMC are the corporation's truck outlets. But Cadillac dealers saw too many customers defect to the competition. Enough is enough.
Lincoln is selling more Navigators than Continentals. People are flocking to Mercedes dealerships in hordes to see the new M320 compact sport/utility. Dodge sold more than 3,000 Durangos in the first month it was out. Next spring Lexus will introduce both a car-based SUV (RX300) and a brawnier truck-based LX470. And gas prices are falling.
Is it too late?
"We obviously don't think so," says John F. Smith, Cadillac general manager (no relation to GM CEO Jack). "It's a whole lot easier to keep a customer than to win him back once he leaves."
Cadillac does not yet have a name for this vehicle. If it's a rebadged Denali, maybe they should call it Everest. It would fit with Caddy's new global image. Just don't look for this thing to show up on the streets of Paris or Tokyo anytime soon.
Indeed, just days earlier Mr. Smith had told reporters there were no plans for a truck-based SUV. Rather, he said his higher priority would be a hybrid car/truck offering based on the next generation Catera platform.
"I just wasn't at liberty to talk then," he says. "Frankly we found a way to enter this part of the market earlier."
What about the Catera-based idea?
"Work on that continues absolutely unabated," he says. "That vehicle stands a chance to be considerably more global in its appeal."
At least one Detroit-area Cadillac dealer is ecstatic with the SUV news. He claims NAO marketing chief Ron Zarrella killed the idea of a Caddie SUV three years ago because it didn't fit the Cadillac brand image.
The dealer says he can sell all the SUVs he can get, but fears that GM may be "missing the boat by two or three years."
ITT's Macher Presses
For Standard ABS
If sales of antilock braking systems (ABS) take a considerable slide, Frank Macher doesn't want anyone to say his company accepted it calmly and moved on to a new product.
The president of ITT Automotive, a top global supplier of ABS, recently unveiled a campaign to educate consumers that ABS is truly worth the extra money.
When ABS was first introduced in 1984 it cost about $2,000. Now, the option is available for as little as $400, and Mr. Macher says his company has done a lot through design changes and better electronics to keep driving the price down.
Mr. Macher's goal: make ABS standard on all U.S. vehicles. He creditsCorp. for already doing so. But in an environment where no one can pass a cost increase onto the consumer, ABS remains an option for other companies' vehicles.
In the early 1990s, demand for ABS was climbing steadily each year. But sales have been stagnant since 1994. In 1996, 62% of new vehicles were delivered with four-wheel ABS, even though 89% of U.S. drivers said in a survey that they want ABS.
Part of the problem can be traced to the debate over the effectiveness of ABS, an issue brake suppliers thought they had put to rest years ago.
"Our finding is they work as intended," Mr. Macher says. But he also admits that people need more education and experience with ABS, perhaps at the dealer level.
ITT Automotive has a lot at stake. The company estimates its 1996 ABS market share was 25% worldwide, 40% in Europe and 25% in North America. Mr. Macher says ITT wants to open a technical center in Japan aimed at selling ABS and stability management systems in that market.
People in the News
You have to be a certain age to remember Frank S. Hedge, now retired and living in Florida.
The longtime Detroit public relations executive, is best known for the 10 years (1967-'77) he spent as public relations vice president for American Motors Corp., helping to launch the Javelin, AMX, Hornet, Gremlin, Pacer and Jeep Cherokee.
Mr. Hedge recently was elected to the PR Society of America's Detroit Chapter Hall of Fame, a fitting tribute for the native Detroiter who, among other jobs also spent 11 years at the McCann-Erickson advertising agency where he worked PR forCorp. and Corp.'s Buick Motor Div.
Early in his career he worked for the Detroit News, Detroit Free Press and United Press International. For five years during the 1960s he headed his own PR firm in Detroit, with his wife, Phyllis, serving as his sidekick. "She was the real brains behind the company," he often said.
Carrying on the tradition, their son Mike now heads Hedge & Co. Inc., a Southfield, MI, PR firm with numerous automotive supplier clients.
Motor Co. Chairman Alex Trotman also picks up kudos as he is named 1997 Automotive Industry Leader of the Year by the Automotive Hall of Fame (AHF).
He'll accept the award next Feb. 1 during the National Automobile Dealers Assn. annual convention in New Orleans.
Among other things, Mr. Trotman's pivotal role in establishing and directing the company's2000 globalization effort is cited by AHF.
When GM'sAutomotive Systems began selling off certain operations in 1993, James W. McLernon contacted GM sources concerning its final drive and forge unit's five plants - plants that he knew well: He'd worked in them during a long GM career. On March 1, 1994, the plants were spun off to a new privately held company, and Manufacturing Inc., and Mr. McLernon became chairman.
Now after 48 years in the automotive industry, "Big Jim" McLernon is retiring, capping a career that included 26 years at GM, rising to Chevrolet general manufacturing manager; president ofManufacturing Corp. of America and, subsequently, also president of its parent, VW of America; and stints at Creative Industries Group Inc. and South Charleston (WV) Stamping and Manufacturing, a former VW plant.
Clearly more at home on the factory floor than the executive suite, Mr. McLernon was known to wear steel-toed safety shoes in both environments. "You never know when you'll need them," he once told a reporter, flashing his patented broad smile. o
LA Show Gets More Firsts
If you want to be the first in the world to see the Oldsmobile Alero, Lexus LX 470, 25th-anniversary Buick Regal, Kia Sephia and a newproduct, Los Angeles is the place to be in early January, not Detroit.
In 1998, as in 1997, the Greater Los Angeles Auto Show opens to the public one week before the North American International Auto Show in Detroit, which poses a quandary for manufacturers.
Last January, visitors to the LA show on the first weekend were short-changed by several manufacturers that did not want to unveil new vehicles in Los Angeles before the media saw them in Detroit. So it was that the all-new Chevrolet Corvette, Dodge Durango, Mercedes-Benz CLK and other vehicles were quietly put on display several days after the public opening.
It looks as if early visitors to the 1998 Los Angeles show will fare better.
Apart from seeing the handful of world premieres, they will also be first in North America to see the newMiata, M Roadster/Coupe, Cadillac Seville, Mercedes-Benz E-430, Saab 9-5, Porsche 911 Carrera and three Daewoo models.
What they'll miss more than anything will be the New Beetle.
will unveil that amidst much hoopla in Detroit on Monday, Jan. 6 - only then will it go on display in Los Angeles, missing the first three show days.
Media and officials from the manufacturers who visit LA during those two days will be treated to 16 press conferences. Daewoo's should be the key conference, as it unveils its roll-out plans for the North American market.
Cadillac andplan to make a splash with the first U.S. showing of their new Seville and Miata, respectively.
The LA Show organizers also plan the inaugural Automobiles and the Environment conference on Dec. 30. Robert C. Stempel, chairman of Energy Conversion Devices, will be the keynote speaker.