Cadillac, Lincoln Begin Long Road Back

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The balance of the decline was management’s responsibility, and the errors were numerous. Significant slipups: The 1986 front-wheel-drive Eldorado and Seville program, a model change disaster that severely damaged the reputation of Cadillac. (Sales of both models dropped to 42% of 1984 volume); Cimarron, Allante and the FWD Fleetwood piled on and contributed to the deterioration of Cadillac’s stature.

Lincoln’s decision to maintain a rear-wheel-drive premium presence, with a downsized Town Car and Continental, was a significant factor in maintaining some semblance of share for the Detroit Two (Lincoln actually outsold Cadillac in 2000).

For both companies, quality of mainstream models deteriorated and the negative perception bled over to their premium models. Fortunately, BMW’s stumble with the 3-Series 4-door model kept the Detroit Two in the game for the rest of the decade.

In essence, Cadillac and Lincoln downsized their models without upsizing quality, and introduced models that demonstrated a complete disregard for the product, quality and service requirements of the customer.

During that era, I witnessed General Motors program management leaders who did not acknowledge the impact of additional competitive entries—especially Japanese premium makes. Bottom line: Reputation damaged, and by their own actions reinforced the perception that premium was the purview of foreign makes.

Fast forward 25 years later: Segment volume doubled, three new Asian brands were firmly established as players and the Europeans offered a substantially broader array of offerings. Looks like the Europeans took the advice of Ray Kroc, the founder of McDonalds, when he said, “If I saw a competitor drowning, I’d put a live fire hose in his mouth.”

The blast of new products from all Europeans jumped their combined share to 50%, and drove Detroit Two share to a troublesome 15.4% of the segment.

GM Chairman CEO Rick Wagoner and Vice Chairman Bob Lutz ultimately reversed the negative momentum by improving the product significantly (and made Cadillac a little more global by introducing Cadillac in China, and to a far lesser extent in Europe).

Current Lincoln management, Ford CEO Alan Mulally included, has continued its positive mojo. Detroit Two’s premium sales performance last year appears to have confirmed some of their product development efforts.

Cadillac’s SRX and CTS made the top premium sales list last year. The new Cadillac ATS, XTS and Lincoln MKZ, which finally got its legs, are very good cars—inside and out – and are starting to generate respectable volume. Through April, Detroit Two’s combined segment share is up to 16.3%.

Will either Cadillac or Lincoln reclaim the top mantle in the United States? Doubt it. The competition is just too intense.

As an example, BMW’s 3-Series has made Car & Driver’s 10 Best list for 22 years in a row. It was also the best seller last year. That is a pretty serious track record.

Yet, both Cadillac and Lincoln have the cash to reclaim some of their greatness and continue the development of great premium cars and trucks. Both brands can seriously say they have begun a long road back to top tier in their home market. Much more is required globally.

What’s required to get to a global top tier? Three words: Product, Proliferation and Persistence. Products for younger buyers across the globe – think Germany, Russia and Brazil; Proliferation with more coupes and convertibles (don’t bring back the old names), a midsize SUV, technology innovation and diesel engines. Persistence: This is a mission that will take at least a decade.

Is there a first and second shift working at the Renaissance Center and the Glass House every day to grasp these opportunities? There should be.

Why? Unlike the Europeans, Japanese premium brands have not yet hit their global stride. Further, the Europeans have a leg up on diesel engines and a true global sales footprint.

In North America, the foreign mystique also will not go away overnight. Additionally, the new kids on the block, the Chinese and Indians, are developing a North American knowledge base with Volvo and Jaguar.

The clock is ticking and the competition will keep on coming. (Whoops! Did I mention Hyundai?) To counterpunch, Detroit says it is bringing more premium models. Please step up the pace.

Warren P. Browne is president of WP Browne Consulting and has extensive experience in the global automobile industry. During the last 20 years, he has held senior executive positions at General Motors, including in Brazil, Poland and Russia. He currently serves as an adjunct professor of Economics at Lawrence Technological University and assists WardsAuto forecast partner AutomotiveCompass in developing new business.