Motor City Blogman

GM Sacks Cadillac Chief Johan DeNysschen

Long-term vision vs. short-term results?

Three sentences stand out in General Motors’ press release announcing Wednesday that Cadillac president/GM senior vice president Johan de Nysschen is out, and Steve Carlisle, the president and managing director of the automaker’s Canadian operations, is in as his replacement.

One is that “The transition will begin immediately.”

The other is a quote from GM President Dan Ammann in thanking de Nysschen for nearly four years of leading Cadillac; “Looking forward, the world is changing rapidly, and beginning with the launch of the new XT4, it is paramount that we capitalize immediately on the opportunities that arise from this rate of change.

“This move,” Ammann adds, “will further accelerate our efforts in that regard.”

De Nysschen was solidly behind the proliferation of Cadillac’s sport/utility and crossover/utility portfolio, as obvious from my interview with him in September 2014, about a month after he took the job.

In the interview, de Nysschen confirmed development of the new Cadillac V-8, which the marque revealed prior to the New York International Auto Show. The Cadillac CT6 and new CT6-V will be offered with the DOHC 4.2-liter twin-turbo V-8 early next year. De Nysschen also spoke of sports and performance Caddys, and while I took this to mean he was gunning for cars like the Mercedes-Benz SL-Class, he told me last January (a couple of months prior to the V-8’s unveiling) that the future performance models would be along the lines of V-Series and VSport sedans.

But he won’t be hanging out at New York’s Cadillac House to watch the sales returns of the new XT4, which almost certainly will become the marque’s bestseller, perhaps at the expense of some XT5 sales. The take on de Nysschen is that he was too conservative, too much a long-term thinker [long considered a quality that foreign automakers have over American car companies] at the expense of short-term results.

Cadillac’s U.S. sales in 2017, which fell 8 percent to 156,440, were considered disappointing even as GM’s luxury brand showed strong growth in China. Note that in the U.S. market last year, Lexus sales were off 7.9 percent, to 305,132, BMW was off 2.4 percent, to 305,685 and Mercedes-Benz was off 0.9 percent, to 337,246. In general, luxury marques took a hit last year, perhaps because too many customers were buying loaded, $60,000-plus pickup trucks, instead. Only Audi was up among the top-five luxury brands, at 16.3 percent, to 226,511.

Infiniti was up, too, by 10.9 percent thanks to an expanding sport/utility and crossover lineup, though still some 3,000 units short of number-five Cadillac, which sold more than 68,000 of its bestselling XT5s in calendar ’17. The new XT4 enters the hottest segment in the industry, compact premium SUVs. But de Nysschen can’t be blamed for lack of sales for a segment in which Cadillac hasn’t yet entered.

It should be noted, too, that de Nysschen openly fought against Cadillac’s dependence on incentives and deep discounts in order to raise average transaction prices and preserve lease residuals.

I don’t need to tell you that these new products, the Cadillac V-8 and the XT4, were in the works before he joined from Infiniti in August 2014. And you shouldn’t buy the argument that de Nysschen is responsible for the head-scratching move of the marque from Detroit to Manhattan, which was in the works by the time he joined the company, even if the location helped lure him to the job.

Also luring him to the job was GM’s plan to spin off Cadillac into a separate business unit. Cadillac’s profits (or losses) will be on GM’s books, yes, but as its own company, the division now has more freedom to spend what it needs on development and, for example, interior materials, none of which are to be shared with Buick or GMC or Chevrolet.

This sort of arrangement means Cadillac needs a leader with the sort of long-term vision de Nysschen has, but also with an eye on the short-term bottom-line in order to please GM shareholders. Did de Nysschen try to spend too much money developing new models? Two key models introduced midway through his short tenure, the XT5 and CT6, fall short of competition mostly in terms of interior fit and finish, even if the CT6 sedan is arguably best-in-class in terms of ride-handling balance and leads in autonomous technology with Super Cruise.

With all this pressure on the luxury marque’s chief, it will be fun to watch how de Nysschen’s replacement, Steve Carlisle, handles Cadillac’s two most important models, the 2019 XT4 on sale this fall, and its high profit-margin 2020 Escalade coming about a year later.

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