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Cars: Caddy's Comeback

Once the venerable "standard of the world," Cadillac fights back with a move upmarket.
By Paul A. Eisenstein | From Cuban Models, May/June 03
Cars: Caddy's Comeback

As the lights dim, silence sweeps across the old opera house. Rumors have been working their way through the automotive inner circle for weeks and now, everyone seems to be holding their breath, waiting for the moment of truth.

The "standard of the world." There's no modesty in that motto, nor room for further exaggeration. For much of the last century, Cadillac could rightly claim that title. It introduced the technology, delivered the designs and racked up the sales. But its halcyon days are over. It no longer sets the benchmark that others follow. Its sales have slipped precipitously, and its traditional buyer base is rapidly dying off. Without something radical, Cadillac will become little more than an icon of the past.

Slowly, a single light begins to shine from the side of the stage. There's not much to see at first, just a silhouette behind a scrim, turning and teasing, like a sheet-metal Sally Rand doing an automotive fan dance.

With the launch of the CTS sedan last year, Cadillac introduced its controversial, knife-edged "Art & Science" design theme. It's a striking -- and decidedly risky -- shift in direction for a brand that's spent the last several decades unsuccessfully trying to play it safe. CTS is just the first in a procession of new products coming to market as part of a $6 billion makeover of the wounded automaker. The question is whether Cadillac can reach forward into the past to again become the automotive king of the hill.

Suddenly, the scrim lifts, the spotlights glare, and the big car drives straight towards the audience, which responds with a collective gasp.

Sultry, sensuous -- and completely over the top -- the Sixteen isn't your ordinary Cadillac. It celebrates the automaker's post-war golden era, when it was the biggest and baddest brand on the block. Measuring nearly 20 feet, nose to tail, Sixteen dwarfs even the big Caddy Escalade SUV. The sedan's name derives from the equally massive, 13.6-liter V-16 under the hood. At 1,000 horsepower, it makes even the most powerful Ferrari seem anemic.

"Our dream was to make a car that embodied everything that once made Cadillac the standard of the world," declares General Motors Vice Chairman Bob Lutz. Since the former Marine fighter pilot arrived at GM nearly two years ago, Cadillac has become his obsession, and for good reason. "If you can't fix your flagship brand," he cautions, "you won't get anything right."

Sixteen's rollout as a show car at the recent Detroit auto show was particularly well timed, considering the sudden explosion in the ultraluxury segment. There's the new Phantom from Rolls-Royce, Bentley's Continental GT, and two versions of the mammoth Maybach from DaimlerChrysler. Collectively, they've redesigned the concept of rolling affluence.

Can Caddy compete in this new world order? Sixteen "represents our vision of Cadillac's move upmarket," notes Lutz. But moving up-market is just the least of the challenges Caddy faces.


The Standard of the World

It wasn't always this way. The automaker's history dates back to 1902, when Henry Leland rolled out his first luxury car. It was an open two-seater powered by an engine with a single cylinder, but it could reach 30 miles an hour, astonishing for the time. Leland's creation also featured rack-and-pinion steering and variable valve timing, technologies considered premium even today.

Cadillac's emphasis on technology was a critical element in its early success. It offered the industry's first closed body as an option in 1905 -- then made it standard five years later. An early proponent of standardization, Cadillac was rewarded with the coveted Dewar Trophy in 1908, recognizing its use of interchangeable parts. In 1913, the automaker became the only company in the world to win the trophy twice, that time for the introduction of the electric self-starter. Caddy also claims credit for introducing electric, rather than acetylene, lights, and for the first mass-production V-8.

In 1927, GM signed on Harley Earl, a custom coach builder from Hollywood, to create the LaSalle, the first American automobile crafted by a stylist. Until then, function had always ruled form, but suddenly, shape mattered. Earl settled in Detroit, creating the Art & Colour department, the first in-house design studio.

There was plenty of competition, such as Packard and Stutz, as well as Lincoln, which Leland had launched after selling Cadillac to General Motors in 1909. (Lincoln was later sold, to Ford Motor Co., in 1922) But Caddy's double whammy -- its ability to deliver the latest technology in a high-styled package, made it the marque to chase.

Cadillac had a flair for the outrageous. In 1930, it became the first and only automaker ever to put a V-16 into anything approaching high-volume production. With a hood that stretched out towards the horizon, the automobile was one of the first road vehicles capable of approaching 100 miles an hour. Known as the V-16, the car continued in production until the dawn of the Second World War, when Caddy's assembly lines were converted to military production.

It was in the post-war era that the automaker scored some of its biggest successes. Arguably no design cue is more closely associated with Cadillac than the tail fin. Inspired by the Lockheed P-38 Lightning fighter plane, the first fin appeared, in pubescent form, on the 1948 Fleetwood, but quickly found a life of its own. It became so popular that it was copied by almost every automaker. Caddy designers seemed determined to prove that theirs were bigger, fins reaching what some would call the pinnacle -- others the height of absurdity -- on the '59 Eldorado Biarritz.


Snatching Defeat From
the Jaws of Victory

Beware what you wish for. Cadillac's domination of the era was unquestionable; but it also became something of a trap, a measure of success almost impossible to maintain. Iconic products like the Biarritz threatened to visually confine the automaker in the past. Post-Earl, Caddy designers struggled to come up with equally impressive alternatives. They scored a few modest successes, such as the bustle-back Seville of the '80s. But the brand's vision became increasingly complacent, increasingly uninspired.

The twin energy shocks of the 1970s made matters all the worse. In a bid to become more socially conscious -- and relevant in the face of a withering assault from Asian automakers -- GM decided to downsize all its products and put a premium on fuel economy. Inadvertently, it set in motion a chain of events that nearly led to Cadillac's collapse.

To rush its new cars to market, GM cut corners. The results were disastrous. For one thing, the entry-level Chevrolet Cavalier looked a lot like the premium Cadillac Cimarron. New fuel-efficient technology didn't work as planned. Caddy's V-8-6-4 engine was supposed to save gas by operating fewer cylinders when less power was needed. But it ran as roughly as Leland's original one-cylinder engine -- when it worked at all. Overall, quality collapsed. The luxury marque's new assembly plant, in the Detroit suburb of Hamtramck, was supposed to serve as a showcase of GM's technological prowess. Instead, it became a robotized nightmare. Robots welded car doors shut. Workers
couldn't properly put parts together.

"My mirrors kept falling off," recalls Art Rose, a Detroit physician and lifelong Caddy customer, who, after suffering an endless string of trips to the repair shop, reluctantly traded in his '84 Seville on an import. He wasn't alone, and the timing couldn't have been worse. European imports had also downsized: Mercedes had its new "Baby Benz," the C-Class, and BMW introduced its 3 Series. These new products connected with the increasingly affluent Baby Boomers in a way that Cadillac couldn't. And then, in 1989, a new front in the luxury wars opened up. Toyota, whose very foundation rested on the loyalty of the Boomers, launched the Lexus brand, while Nissan countered with its own upscale marque, Infiniti.


"Nearly Dead"

Long gone were the days when Cadillac defined prestige overseas, but suddenly, even at home, in the American market, the brand was under assault. GM's flagship rushed out a string of me-too products, such as the ill-fated Allante. The two-seat roadster was perhaps best known for the number of places water would leak from a complex convertible top that required a jigsaw puzzle master to operate.

The automaker's problems were actually compounded by the continued success of models like the Deville, which helped Cadillac maintain its lead in the U.S. luxury sales charts -- albeit by a steadily dwindling margin. Those who did buy were "nearly dead," grumbled a former Cadillac executive, when asked the average age of its customers. To the sought-after Boomers, "Cadillac is an old person's car," said automotive analyst Chris Cedergren. "Their definition of a luxury car is much different from their parents and grandparents, and to them, the imports best represent that image."

Indeed, the very nature of luxury was shifting, and Cadillac was slow to respond. It wasted nearly a decade refusing to consider the addition of a light truck to its lineup, even though sport-utility vehicles, minivans and pickups were accounting for a steadily larger share of the American automotive market.

It took the proverbial smack upside the head with a 2x4 to turn things around. In 1999, Cadillac announced it had again captured the U.S. luxury sales crown, eking out a modest victory over Lincoln during the final weeks of the year. But it turned out there'd been a little last-minute fudging of the numbers, and the following May Caddy officials were forced to fax an embarrassing apology to their rival. If they thought they could continue on course, it was obvious that path was heading, lemminglike, right off the cliff.

General Motors is often compared to a lumbering supertanker. Perhaps, but it has shown a surprising nimbleness now that it's decided to steer Cadillac in a new direction.


A Cold Wind

A snow squall has settled over the old Strategic Air Command base at Kinross, in Michigan's frigid upper peninsula. Suddenly, a black truck bursts into view. It zigzags its way down an icy obstacle course, then heads back to try again. While there were plenty of complaints about this last long winter, Cadillac turned the big freeze to its own advantage by squeezing in every possible minute of foul-weather testing before giving the final go-ahead for the launch of the new SRX.

Neither fish nor fowl, car nor truck, the SRX is the latest entry in a fast-growing segment nebulously dubbed crossover vehicles. It's also Cadillac's first attempt to go head-to-head with other segment busters, such as the Lexus RX300, Acura MDX and BMW X5. "This is a critical product for us," notes Caddy General Manager Mark LaNeve -- almost an understatement.

When Caddy lost the 1998 sales race, it had just four models in its lineup, none of them trucks. By mid-2003, trucks and truck-like vehicles will make up half the division's model mix, which will range from the car-based SRX, which will debut midyear, to the Escalade XUV, a massive machine mating the front end of a full-sized SUV to the bed of a pickup.

Caddy isn't ignoring the car side of the equation. The bet on the edgy CTS is paying off: sales are pushing the limits of the automaker's production capacity. In June, Cadillac will roll out the new XLR, and it's nothing if not ambitious. Another knife-sharp Art & Science design, it's a two-seat roadster, with a retractable hardtop, designed to go up against some tough company, such as the Mercedes-Benz SL and the Lexus SC430. Under the skin, the XLR uses a modified version of the next-generation Corvette chassis, while it draws power from a 350-hp supercharged Northstar V-8.

And there's more on tap. "We've decided we're not going to offer an entry-level car" akin to the Jaguar X-Type, says LaNeve. "Instead of $20,000 Cadillacs, the answer is to cover the big segments that we're in and then do $100,000 Cadillacs." The focus on premium products will begin with the replacement for the aging Seville sedan. The new Seville, which will be renamed the STS to mimic Euro-style alpha designations, will emerge next year from the same new plant, in Lansing, Michigan, that produces the CTS. The STS will aim upmarket to
provide a credible alternative to premium, full-size imports.

Credible is a tough word. The bar has been raised significantly in the luxury car segment, and you can't succeed by trying to limbo under it. "The level of refinement has to be a notch up" from Cadillacs of the past, concedes Jim Taylor, the vehicle line executive in charge of the CTS program. The small sedan is a definite improvement, critics acknowledge, especially when it comes to ride and handling, thanks to one of the stiffest chassis in the segment. But most feel CTS -- and Cadillac as a whole -- has a ways to go, particularly when it comes to interior refinement. "It's an area we're working on," promises LaNeve.


Back to its Roots

Turning things around, the affable executive stresses, requires Cadillac to return to its roots. That doesn't mean going retro, like some other manufacturers. But Caddy needs to reemphasize the things that made it a success a century ago: power, technology and styling.

Cadillac's new V-Series will certainly deliver the power. Modeled after Mercedes' performance unit, AMG, the series will include V-badged versions of virtually every future Cadillac product, starting next year with a 400-horsepower screamer, the CTSv.

The push for performance puts a premium on advanced technology, but so does the renewed emphasis on fuel economy. The STS is slated to serve as the launchpad for GM's new Displacement on Demand system. Though company officials would prefer to forget the comparisons, DoD is similar in concept to the old V-8-6-4 in that it will idle half its cylinders when power demands are low. "But the big difference," explains David Cole, director of the Center for Automotive Research, in Ann Arbor, Michigan, "is that they now have the technology, primarily the electronics, to make it work right."

As for styling, the Art & Science theme certainly stands out. But that's likely to undergo a subtle evolution, Lutz hinted. The Sixteen shows where Cadillac is heading. Compared with the hard, angular CTS, the big sedan, he notes, was "updated, with soft, sweeping surfaces between the [hard-edged] folds."

Since its debut in Detroit in January, the Sixteen has been one of the most talked-about concept vehicles on the auto-show circuit. Will it ever be built? For the moment, the answer is no, but it's a topic of constant consideration at high-level meetings. There's a growing likelihood, company insiders admit, that GM will turn to an outside production house to roll out a limited number, perhaps 1,000 at $250,000 a copy.

One thousand wouldn't even register on the sales charts, where the luxury segment now accounts for more than 1.5 million cars, trucks and crossovers annually. But "we're not focused on being number one again," LaNeve asserts. Not in volume, at least. With Sixteen, Cadillac would regain a seat at the adult table, playing in the same league as the world's best.

The Sixteen could also spearhead Cadillac's much-delayed assault on overseas luxury markets. Currently, it sells only a few thousand vehicles outside North America. There'd be tremendous credibility earned by going head-to-head in the home market of its competitors. And it might again permit Cadillac to lay the claim that it really is the global standard.


Paul A. Eisenstein publishes an auto magazine on the Internet at