Is This How General Motors Will Fix Cadillac?

GM's slumping luxury brand gets a new boss. Can he turn things around?

Jul 13, 2014 at 2:35PM


After a strong 2013, sales of the well-regarded Cadillac ATS are down over 20% this year. GM hopes this new coupe version will help draw buyers. Source: General Motors Co.

Is the Cadillac brand finally headed back in the right direction after months of disappointing sales?

Certainly the news is promising. General Motors (NYSE:GM) said on Friday that it had appointed Johan de Nysschen to a new role as a GM executive vice president and president of the Cadillac brand.

De Nysschen replaces Bob Ferguson, whose title until Thursday was Senior Vice President, Global Cadillac. Ferguson, who left his role as GM's chief Washington lobbyist to take over Cadillac in 2012, has been spending most of his time in Washington since March, dealing with the fallout from GM's recall scandal. GM on Thursday named him head of Global Public Policy.

Cadillac's sales rose about 30% last year under Ferguson's leadership, but the brand has slumped lately, losing ground in a rising market. With CEO Mary Barra clearly needing Ferguson's skills and contacts in Washington, the need for strong new leadership at Cadillac was clear.

So, is de Nysschen the right choice for the job?

Strong credentials for a difficult job
He certainly brings an impressive resume to GM. De Nysschen resigned earlier this week from Nissan (NASDAQOTH:NSANY), where he ran the Infiniti luxury brand from its global headquarters in Hong Kong, citing a desire to return to the United States. Infiniti's global sales were up 30% in the first half of 2014.

Before joining Nissan, de Nysschen spent eight years as the U.S. head of Volkswagen Group's (NASDAQOTH:VLKAY) Audi brand, boosting its share of the U.S. luxury market to 9.5% in 2011 from 5.3% in 2004, according to figures from Automotive News

De Nysschen will report to GM President Dan Amman in his new role running Cadillac. He'll be responsible for "all aspects of Cadillac globally including sales, pricing and network development, strategic brand development and marketing and product portfolio planning, including critical input for product engineering and design," GM said in a statement.

But here's his real job description: Solving Cadillac's biggest problem.

This is Cadillac's biggest problem
Here's Cadillac's problem: After years of stop-and-start efforts, Cadillac is finally -- finally! -- getting products that can go head-on with the German brands that rule the global luxury business. But it's not stealing nearly enough sales from those German rivals.


The new-for-2014 Cadillac CTS sedan is Motor Trend's most recent "Car of the Year" award. Some reviews have rated it above BMW's 5 Series. Source: General Motors Co.

Cars like the Cadillac ATS and CTS sedans are no-excuses contenders, going head-to-head with rivals from BMW (NASDAQOTH:BAMXF) and Daimler's (NASDAQOTH:DDAIF) Mercedes-Benz in test after test and showing themselves up to the challenge, over and over. 

But the Cadillac brand is still damaged, thanks to decades of products that just couldn't compete. Plain and simple, it lacks the cachet of BMW or Audi or Mercedes. For many German luxury-brand loyalists, Cadillac is still a step (or two) down -- certainly not a brand to aspire to.

That's what GM needs to fix. It has to turn Cadillac into the brand that will make a BMW owner want to trade in his ride.

Having credible products is the first step toward making that happen. What's the next step? 

That's for De Nysschen to figure out. We'll see if he's up to the task.

Warren Buffett's worst automotive nightmare (Hint: It's not Tesla Motors!)
A major technological shift is happening in the automotive industry. Most people are skeptical about its impact. Warren Buffett isn't one of them. He recently called it a "real threat" to one of his favorite businesses. An executive at Ford called the technology "fantastic." The beauty for investors is that there is an easy way to invest in this megatrend. Click here to access our exclusive report on this stock.

John Rosevear owns shares of General Motors. The Motley Fool recommends BMW and General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.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.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information