General Motors' Shocking Statement
Aug 31st 2011 4:03PM
Updated Aug 31st 2011 4:04PM
You could hear the jaws dropping throughout the automotive media when General Motors (NYS: GM) unveiled its surprising new Cadillac Ciel concept car last week. In and of itself, the Ciel -- a big, over-the-top luxurious four-door convertible that is unlikely to ever see production -- may not seem that significant. Automakers create show cars all the time, after all, and many are nothing more than flights of designer fancy.
But in the new cost-conscious GM, nothing, not even a fanciful show car, happens without a business case. The business case for building and showing the Ciel was pretty obvious, and it's important. Long story short: GM is about to do something very big with Cadillac.
And that says some very interesting things about management's intentions for the new General Motors.
"Standard of the World?" Are they serious?
Years ago -- like, fifty years ago -- Cadillacs actually deserved the brand's old ad tag line, "The Standard of the World." Cadillacs were GM's best, most advanced products in an era when GM was the biggest, strongest industrial company in the world. Cadillacs were extremely expensive, luxurious in an arrogant, very American sort of way, and were routinely compared to the very best cars made elsewhere in the world.
In reality, Cadillac's products have fallen a long way in the last half-century. Still, something about the idea of that kind of Cadillac has stuck around. It's a button that has been waiting a long time to be pushed, and it's been decades since GM built a car that was really able to do so.
The Ciel finds that button and pushes it hard. It's huge and imposing, with a big, arrogant grill and headlights that shout "high-tech exclusivity." It has a powerful engine (a high-tech hybrid), an opulent interior, and many costly looking details that recall the best of Cadillac's history, right down to the discreet little tailfins feathered into the rear deck.
Tailfins? Yes, tailfins, and they're not kidding. GM, which has recently had some successes in the mass market, is about to commit big resources to reclaim Cadillac's historic position in the global automotive pecking order. Think of the Ciel as management's last-minute sanity check.
A daring goal with global implications
GM CEO Dan Akerson has said repeatedly that he aims to make Cadillac a global peer of brands like Daimler's (OTC: DDAIF) Mercedes-Benz, BMW (OTC: BAMXY), and Toyota's (NYS: TM) Lexus.
That kind of talk is easy to shrug off from a Detroit CEO -- Ford (NYS: F) executives have been saying similar things about the Lincoln brand -- but the Ciel shows that GM is really serious about its dream. GM management has reportedly been debating an expensive new vehicle platform, called Omega, which would underpin a series of large, powerful Cadillacs aimed directly at the top-of-the-line offerings from Mercedes and BMW.
The Ciel, GM executives have said, indicates how such cars will likely look, and publicly tests the idea of a high-end Cadillac. And although it was shown in California, the primary audience for these Cadillacs might not be American. While Buick and Chevrolet are established brands in China, Cadillac is so far a lower-profile entry. Upscale Chinese consumers are just now finding their ways to brands like Audi and Mercedes. There's a window of opportunity open right now for GM to establish Cadillac as a peer of those companies before a huge new audience.
But GM needs the right cars to accomplish that. The Ciel signals that those cars are coming.
A huge expansion beyond the flagship
While the Ciel suggests what the upcoming top-of-the-line Cadillacs will look like, GM's plans for the marque go well beyond a six-figure supersedan. In recent weeks, GM has confirmed production plans for the ATS, a small sports sedan; the XTS, a larger sedan that is essentially a more refined version of recent big Cadillacs; and the ELR, a sharply styled upscale variant of the Chevy Volt.
These cars are "just the bow wave" of a slew of upcoming new Cadillacs, Cadillac chief Don Butler told reporters on Monday. Akerson has hinted that the ATS and XTS are interim steps, cars that don't quite represent his vision for the brand. It may be a few years before we can see management's current intentions reflected in actual sheet metal.
But it's looking like GM's management is really serious about a full-blown Cadillac revival. Whether they succeed or fail, the fact that they're even trying is one more sign that the General has changed an awful lot in the last year -- even if Wall Street doesn't seem to have noticed.
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At the time this article was published Fool contributor John Rosevear owns shares of Ford and General Motors. You can follow his auto-related musings on Twitter, where he goes by @jrosevear. The Motley Fool owns shares of Ford. Motley Fool newsletter services have recommended buying shares of Ford and General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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