Upstart heads off for life in the big city; comes home to live in Dad’s basement.
That’s the Cadillac story in September of 2018, after the announcement that the 116-year-old American luxury brand was decamping from its swank SoHo apartment to a room over the garage. The expected location for Cadillac’s new home is a 150,000-square foot building GM scored from its former advertising partner Lowe Campbell Ewald back in 2014 for $2 million.
As early as June of this year, Cadillac was adamant that it was staying in New York: “It’s 100 percent that we’re staying here, that was never a question,” Cadillac spokesman Andrew Lipman told the Detroit Free Press.
There were grand plans for the space at 330 Hudson Avenue in Manhattan’s trendy SoHo digs. Somewhere around 150 people worked on the 15th and 16th floors of the high-rise building, and Cadillac House — a beautifully enticing retail space — occupied the main floor, showcasing the latest products to the swells and well-heeled in the city.
The story in Automotive News notes that GM will continue to maintain the Cadillac House space, which stands to reason because it’s still paying the remaining six years of a ten year lease, and it spent $12.7 million on its renovation.
The future looked rosy for Cadillac at the time of the move. It was on the verge of launching its all-new CT6 luxury sedan, and it was on the verge of announcing BOOK by Cadillac, a $1,800-per-month lease scheme that allowed subscribers to use any Cadillac vehicle for any length of time, rather than being locked into one vehicle for the entire term of the lease.
Neither plan worked out. In its best month, Cadillac sold just over 1,300 CT6 models, back in September of 2016. From January to July, Cadillac only managed to sell between 650 and 1,000 examples of its flagship automobile.
BOOK by Cadillac has also had its issues. In testing, the price was $1,500 a month, but once it was out of beta testing, it rose another $300, in addition to a $500 signup fee.
The biggest issue has been what should’ve been the most obvious: Parking. Unlike a ZipCar or a car rental, when you sign up with BOOK by Cadillac, you’re responsible for parking the car until it’s picked up, even if you’re not using it. Considering the bulk of BOOK by Cadillac’s customers are going to be in the city, that poses a particular issue, although if you’re willing to spend $1,800 a month on a car you’re not using all the time, maybe springing for a parking space isn’t your biggest concern.
Other complaints arose, too. As part of the program, you’re limited to 2,000 miles a month, and 18 vehicle changes a year. V-Series vehicles — the sportiest of Cadillac’s cars — are only available from March to October “when driving conditions are favorable,” which is understandable in New York City, maybe not so much in Los Angeles.
The parking situation was an issue Business Insider brought up with Cadillac’s Melody Lee, the former Global Director of BOOK:
“There are so many interesting, entrepreneurial ways to approach parking. Whether it’s pointing you towards the nearest parking structure or partnering with really interesting companies…that do valet parking for you wherever you go, there are a lot of ways we could do it,” Lee told Business Insider.
“So those things are absolutely top of mind and things that we are working towards in the next iteration of Book.”
That hasn’t changed, however. Insurance and registration is covered, but parking isn’t.
Then, Lee found herself without a gig in July of this year. If you ask industry insiders one thing about her tenure at Cadillac, it’s a 2014 interview she gave with Forbes entitled “For Cadillac’s brand director, it’s not about the cars”:
“[T]o get more millennials like herself to start thinking about buying a Cadillac as opposed to an Audi or a BMW, Lee isn’t focusing on the cars themselves. Instead, she is putting her energy into changing what the cars represent.
‘We want to be a global luxury brand that happens to sell cars. We don’t want to be an automotive brand,'” she said. Trouble was that after nearly four years in a costly headquarters, Cadillac was neither a global luxury brand, or selling cars.
Lee wasn’t the only executive that found herself out at Cadillac. Uwe Ellinghaus, Cadillac’s marketing chief declared in 2014 that when he hired staff, he wasn’t looking for car people. “When I recruit new people, I do not need petrolheads,” he said. “We have more than enough petrolheads, and we will still. I need people with experiences in other industries, but with luxury brands.”
Ellinghaus left the company in 2017, resigning for “personal reasons,” according to a spokesman from Cadillac.
Cadillac CEO Johan de Nysschen also put himself out to make consumers and the media understand what this new Cadillac was all about.
On the move to make Cadillac a stand-alone business unit: “Emails from GM [retirees] suggesting that is the dumbest idea since the ‘Cimarron.’ I quietly wonder if any of them had a hand in creating that masterful monument to product substance.”
On the idea of car-sharing: “For me, I absolutely will not be moved around in an Uber. I don’t feel like being moved around by some Hyundai Santa Fe. It’s not how I roll.”
de Nysschen left Cadillac in April.
(For the record, Uber has a market value of $62 billion, and Hyundai sold over 11,000 Santa Fes in August of this year.)
This isn’t the first American luxury brand that sought to break free of its Michigan roots, only to come home humbled. In 1999, Ford Motor Company — under its CEO Jacques Nasser — assembled a conglomerate of luxury brands including Aston Martin, Volvo, Jaguar, Land Rover, Lincoln and Mercury under the Premier Automotive Group banner, and moved them collectively to a brand new, $68 million headquarters in Irvine, California.
By 2006, the plan proved to be an unmitigated disaster, with Ford Motor Company jettisoning Aston Martin, Jaguar and Volvo to suitors from around the world, shuttering the Mercury brand entirely, and moving Lincoln back to Michigan.
Today, the $68 million building is headquarters for that other American luxury brand, Taco Bell.