General Motors' Shocking Statement

You could hear the jaws dropping throughout the automotive media when General Motors (NYSE: 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 (NYSE: TM  ) Lexus.

That kind of talk is easy to shrug off from a Detroit CEO -- Ford (NYSE: 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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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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  • Report this Comment On August 31, 2011, at 9:49 PM, baldheadeddork wrote:

    John, it's been a lot longer than fifty years since Cadillac was the standard of the world. You have to go back to the 1950's to find its heyday. By the early 70's the brand was well on the way to ruin.

    (This reminder that we're old courtesy of Geritol...)

    Is the Ciel the bold statement GM needs to make now? It is a stunning design but I think GM is paying attention to the wrong part of its company. Cadillac is in relatively good shape. The SRX is a hit, the CTS is very good, and the upcoming ATS and XTS should be pretty good cars. And it's not like Cadillac is in the same boat as Lincoln and needs a big design statement to recreate its image. The Ciel works in large part because it is so immediately recognizable as a Cadillac thanks to the (now iconic) Art and Science design theme.

    Cadillac is in pretty good shape. Buick is even better. GMC's design signature is the most subtle of all, but it works really well.

    And then there's Chevrolet. Very good engineering (even if the best stuff is from Opel), and really good value, but the brand is a hot mess of styling and brand identity. Aside from the Camaro everything they've made in the last five years looks like it was designed by Hertz and Avis.

    It shows in the sales numbers. Chevrolet's market share has remained flat while everything else at GM has taken off. Another indicator is GM's failure to retain old Pontiac and Saturn buyers.

    GM has neglected design at Chevrolet for years and it appears they have no interest in correcting it. Look at the Ciel and then the 2013 Malibu. If you took off the badges and erased the A&S recognition in your mind, could you ever imagine that both of these cars came from the same design studio?

    Yeah, I know I come off like Ford can walk on water - but I think they have their priorities right. Lincoln is an unmitigated disaster. Rumor is Ford is working on some stunning new designs for Lincoln, but it's not coming at the expense of the Ford brand. Just the opposite. Ford could have released the stunning Evos concept as a Lincoln and it would have been a huge PR hit, but they said it was the future face of Ford.

  • Report this Comment On September 01, 2011, at 9:41 AM, TMFMarlowe wrote:

    @baldheadeddork: I was thinking early '60s as the end of Cadillac's zenith -- maybe '64 or so if I had to pick a year, though the first FWD Eldorados (which came a couple years later, IIRC) were still pretty nice cars. But it's probably true that they were already some way down the hill from the Broughams etc by then.

    But I digress, and yeah, Geritol.

    I hear you re Chevy design -- even the current Corvette looks like a tired mishmash, though I know a lot of attention is being paid to the shape of the next one. The new Malibu is fine, but not all that interesting -- then again, that's probably okay in that class. I'm very curious to see the Impala.

    But I find the Cadillac story so interesting because it's one more sign that Akerson et al are aiming really high -- and while we might quibble with some of the details of execution (and I certainly have, as you know), by and large it looks to me like they're going about this in a viable way.

    And that's a really interesting story. As is the Lincoln thing, which I initially thought about working into this article but ran out of space. That's a topic for next week, maybe.

    John

  • Report this Comment On September 01, 2011, at 9:55 AM, thebonezone wrote:

    It's good to see GM leading the way and trying to make cars people can be proud of. It was sad to see the brand mirred in the SUV era as Toyota moved forward and made vehicles that addressed issues like rising fuel costs and global warming. It was even sadder to see that stubborness ride them all the way to bankruptcy. It seems the company is trying to make good quality cars again that we will actually be able to drive in the future (electric, hybrid etc.) and taking the lead on these concepts rather than being reactionary.

  • Report this Comment On September 01, 2011, at 10:23 AM, jimmy4040 wrote:

    Hard to say from just a picture, but it appears that the front grill is out of proportion to the rest of the car. If you're selling a big money car, you can't afford to get anything wrong.

  • Report this Comment On October 28, 2011, at 11:54 AM, bobemakk wrote:

    GM still owes billions to the US government. The Cadillac CTS is an ugly car and I don't see anything appealing about it's style. I own a Lincoln MKZ which surpasses the Cadillac's style and is the epitomy of US styling. We also owned a Mercedes, another epitomy of styling combined with German engineering. Two of the best cars built. GM can't even come close.

    A co-worker had two Cadillac CTS leases, she gave up on both, since they were always in the shop. She now owns a brand new Ford Taurus, and said it is far better than any of the Cadillacs she had.

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