Catera on a hot tin roof: it'll test GM in more ways than one

RUSSELSHEIM, Germany -- General Motor's Corp.'s efforts to globalize its automotive operations and switch to brand-specific management were conceived at its world headquarters in Detroit. But live tests for both efforts are being born at Adam Opel AG, part of GM of Europe's massive complex here not far from Frankfurt.

The Opel Omega MV6 is being Americanized to be sold in the U.S. next fall as the '97 Cadillac Catera. Under the guidance of Cadillac engineers and designers -- members of Gm's first brand team -- this is yet another attempt by the world's biggest carmaker to target international market segments and source them with the product that best meets a need, no matter where it originates.

This time it's David Nottoli who is looking down the business end of a double-barrel shotgun. As Gm's first "brand manager," Mr. Nottoli gets to be the prototype for a system that is intended to bring accountability to the carmaker. And because he is responsible for the success or failure of Cadillac's new Catera, a big chunk of the future of Gm's luxury division has been placed in his hands, too.

Mr. Nottoli sits atop Cadillac's effort to redefine its image and change its customer base. With Catera, Cadillac says it will be the first American car in the near-luxury market. Since 1991, the large luxury segment has shrunk from 52% of luxury sales to an expected 34% this year, while the near-luxury segment has grown from 25% to 39% of luxury sales. That leaves Cadillac with no product in that $30,000 to $38,000 segment -- the largest chunk of the luxury market.

Near-luxury buyers are younger, more educated and more culturally diverse. That means Cadillac must attract baby boomers, affluent ones who want and can afford to spend $30,000 or more for a new car. Thus Cadillac needs a product that import buyers will drive home.

Rather than developing one from scratch, the quickest and cheapest way is to source one from its corporate sibling. Now that GM President John F. (Jack) Smith Jr. has enthusiastically signed off on the project, Cadillac faces some stiff challenges.

Gm's luxury division has to retrain its dealers to meet the needs of a far more demanding customer, one they've never dealt with before. Dealers have to know the car inside and out. and they must learn to satisfy a customer base that's more ethnically diverse and contains many more women.

Both Mr. Nottoli and John O. Grettenberger, Cadillac's vice president and general manager, say not all of the division's U.S. dealers will get the Catera. And the brand manager adds flatly that if a dealer doesn't want to do the training, or if he fails the program, he won't get the car.

The pruning of Cadillac's dealerships seems to be an underground agenda.

Cadillac sold 210,686 cars last year through its 1,600 outlets. Saturn Corp. sold almost 76,000 more cars than Cadillac in 94 using about 1,200 fewer dealerships. Ed Williamson, head of Cadillac's National Dealer council, says all the division really needs to successfully sell the Catera is 600 to 800 outlets.

But first comes revamping the platform for this market. It's a lot more complex than simply taking off the Omega badge and slapping on the Catera name. The Omega had to be almost re-engineered to meet American safety rules and tastes.

For instance, the passenger compartment had to be strengthened because Opel conducts crash tests predicated on occupants wearing seat belts. Europe also doesn't have 5-mph (8-km/h) bumpers. Even cup holders create a cultural chasm between American drivers and their European cousins. Omega doesn't have them, but Catera does.

Cadillac's biting off a mouthful. It's entering a market where some of the best cars in the world, with the most loyal customers, reside. It wants to grab about 6% of the near-luxury segment in Catera's first year.

Aging demographics are spurring Cadillac. The average Fleetwood owner is 62, and Seville posts a median age of 52. As the first of the baby boomers turn 50 next year, Cadillac must have cars to attract younger, import-orientated buyers.

To that end, Mr. Grettenberger says the higher-line Seville, along with the Eldorado coupe, will be redesigned to give Catera owners -- with a target median age of 44 -- someplace to move up to.

But first Cadillac has to get those import buyers into the fold. As brand manager, Mr. Nottoli is responsible for developing the lure to snag them.

The Catera program also has two other facets that are just as important. Mr. Nottoli is the first of Gm's brand managers. From Gm's chairman on down, all eyes are on him and his team, "We're pathfinders," he says. "There's a lot of collective learning. We want to pass along lessons to other brand managers." He says he's up to the challenge but quickly jokes that his hair has gotten a bit thinner.

No wonder. The Catera program also is the cutting edge for Gm's attempt to globalize its carmaking operations. Next in line with global origins could be an all-new, larger Saturn model. The Russelsheim tech center is working on the project. Reportedly the Opel Vectra, which was introduced at the Frankfurt auto show, will be used for the project.

During the Catera press briefing at GM of Europe's tech center, Americans and Germans were friendly enough to each other. But as GM attempts to cross-source more, some egos no doubt will get trampled. An Opel engineer, for example, says some of the improvements in the Catera could be incorporated into the Omega, but only "where it makes sense."

After all, the Americans came over and made a very good car better. The Catera is structurally sounder than the Omega, it's better equipped and will sell for less in the U.S. That's got to sting a bit. And to keep from bruising the Omega folks' egos any more, a Cadillac official says that's why the Catera wasn't shown at Frankfurt.