Odds Are Cadillac’s New York Stay to Be Temporary

The over/under on Cadillac’s return to Detroit? Put it at 5.5 years, so around 2020, give or take.

In case you missed it, General Motors’ 112-year-old luxury brand announced this week it is packing its bags for the Big Apple, where it will put together a team of 50 or so people in Manhattan’s trendy SoHo district beginning 2015 to soak in all the hipness and spit out a marketing strategy that will put Cadillac more firmly on the radar of luxury-vehicle buyers in the U.S. and the world over.

Will it work? Maybe, but the brand’s revival likely depends more on talent, product and vision than atmosphere.

We’ve seen this movie before, most directly at Ford, which shipped its Lincoln luxury team to Southern California in 1998 for an injection of hip meant to resurrect that luxury brand’s fortunes.

It didn’t. Amid continued sagging sales and Ford’s own financial struggles, Lincoln was shipped back to Dearborn four years later, tail planted firmly between its legs, purportedly because of its newly rediscovered synergies with the Ford brand, but ultimately because the long management pipeline from Michigan to California was cumbersome and costly.

The strategy was repeated by Nissan just two years ago when it moved its Infiniti luxury brand out of its Japan headquarters and into Hong Kong in an effort to distance itself from the parent company and better capture the pulse in China and Southeast Asia.

It’s too early to tell whether that will help turn Infiniti into a global player in the luxury-car market. Coincidentally, or not, Infiniti’s move to Hong Kong came a month before Johan de Nysschen, Cadillac’s new chief, left Audi of America to take over as the Japanese luxury brand’s top executive.

Volkswagen Group insiders say de Nysschen also backed that company’s relocation from Auburn Hills, MI, to just outside Washington, in Herndon, VA, in 2007, a move that, like this one, was seen as breaking away from the Detroit culture.

So far that migration doesn’t appear to have made much of a difference. Audi continues its rise up the value chain begun under de Nysschen’s reign. But, if anything, the VW brand has slid backward in its U.S. market performance.

GM says Cadillac’s move to New York wasn’t de Nysschen’s idea and has been under discussion for some time. But it hardly seems a stretch to think de Nysschen’s jump to Cadillac was contingent on the strategy, talk of which didn’t surface until a month after the former Infiniti exec signed on.

The tactic likely will have benefits and drawbacks on par with those seen in the past. Yes, it should give staffers some new perspective, and it may help the brand attract marketing talent that otherwise wouldn’t come to Detroit.

But it also likely will create some divisiveness within the ranks of GM. Get ready for the inevitable eye-rolling as East interacts with Midwest, and neither side quite understands the other’s point of view. The move is designed in part to put up some walls between Cadillac and the rest of GM, and it ultimately will.

In the end, a culture clash that undermines the whole experiment, inevitable cost pressures that put the expensive New York digs under the microscope, de Nysschen’s departure or Cadillac’s inability to turn its image around all could be reasons to call the operations back home.

It may turn out to be a worthy experiment, and if anyone can pull off Cadillac’s revival, it’s probably de Nysschen.

But at first blush it’s difficult to see relocation as much more than window dressing. Couldn’t Cadillac derive the same benefits simply by hiring the right marketing and advertising firm, maybe one from New York?

Or better yet, if GM wants to learn how to create something vital, trendy and upscale right here in Detroit, talk to the folks at watchmaker Shinola. They’re just up the street.

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