Cadillac is coming to the Big Apple.

As part of the continued expansion of the brand, General Motors today announced a strategic realignment that will establish Cadillac as a separate business unit. In addition, the new Cadillac organization will expand to New York with a new global headquarters opening in 2015.

GM president Dan Ammann said the realignment affirms Cadillac’s importance to GM’s strategy. Creating a new Cadillac business unit enables it to pursue growing opportunities in the luxury automotive market with more focus and clarity.

“With the relentless upward repositioning of successive new-generation Cadillac products, the next logical step is to provide Cadillac more freedom to cultivate the brand in pursuit of further global growth,” Ammann said.

“Cadillac’s mission is to reinstate the brand to a pre-eminent position among global luxury brands, a bold challenge requiring a distinct and focused new organization,” he continued. "More than a division or brand, Cadillac is becoming a center of excellence for our company.”

Johan de Nysschen, who joined Cadillac as its new president in August, will be responsible for the brand’s overall operational performance.

Cadillac’s leadership council is headed by de Nysschen, and consists of

— Jim Bunnell, vice president of sales and service
— Uwe Ellinghaus, chief marketing officer
— David Colasinski, chief financial officer
— David Leone, executive chief engineer
— Andrew Smith, executive director of design.

GM indicated further expansion of the Cadillac leadership team will be announced later.

Expansion Includes New York Headquarters

GM highlighted its broad plan includes expansion to New York City in the form of a multipurpose brand and event space in conjunction with modern loft offices located in the heart of a city renowned for establishing trends and setting standards for the global luxury market.

While the majority of functions with oversight and responsibility for both global and U.S. operations will be located at the new global headquarters, the automaker insisted there will be no change to technical product development teams located in Michigan, nor does the plan impact manufacturing or assembly operations.

The OEM added Cadillac management is reviewing options for which specific staffs will be based in New York and which will remain in current locations in the Detroit-area or elsewhere.

GM pointed out that Cadillac has operations in more than 40 countries. The brand’s ongoing growth has been driven by an expanded product portfolio, leading to 28 percent global growth in 2013 and an increase of about 10 percent so far this year. Cadillac sales in China have grown 75 percent year to date.

“We are very proud of our Detroit roots and heritage, and the majority of the Cadillac workforce will remain in Michigan," de Nysschen said. "But there is no city in the world where the inhabitants are more immersed in a premium lifestyle than in New York. Establishing our new global headquarters in Soho places Cadillac at the epicenter of sophisticated living. It allows our team to share experiences with premium-brand consumers and develop attitudes in common with our audience."

Company officials thanked New York Gov. Andrew Cuomo for his active support of and involvement in establishing the creation of Cadillac NYC.

U.S. Sen. Chuck Schumer cheered the move made by Cadillac.

“To have an iconic American brand like Cadillac choose Manhattan for its global headquarters is another example that this city is a growing hub of innovation," Schumer said.

“New York continues to be a magnet for the best and the brightest companies and workers alike, and as Cadillac continues on its impressive growth trajectory as a global brand, I’m thrilled it will do so based in New York City,” he went on to say.

Industry Reaction

Despite the growth figures brand officials highlighted, Kelley Blue Book senior analyst Karl Brauer touched on the difficult challenges Cadillac faces in its segment.

“Cadillac's product line is the strongest it's been in decades, yet the brand is losing sales and market share in today's hyper-competitive luxury market. A move to New York may add status to its mailing address, but what's really needed is clearer direction in Cadillac's sales and marketing efforts,” Brauer said.

“The new management team needs to find its footing and execute in these areas as quickly as possible. Hopefully the move doesn't delay this process,” he added.

KBB executive market analyst and editorial director Jack Nerad also touched on what this move means for Cadillac.

“New York is widely regarded as the world’s medium capital, so there is some logic in locating Cadillac headquarters in the city, since Cadillac’s goal is to cement itself as a global luxury brand.  At the same time headquartering Cadillac away from the General Motors headquarters in Detroit might present some logistical issues,” Nerad said.

AutoTrader.com senior analyst Michelle Krebs compared the moves Cadillac is making to its primary competitors in the luxury segment and what else the brand could do to boost its future.

“It makes some sense for Cadillac to have a strong presence in New York. New York City, along with Los Angeles, are the biggest luxury car markets in the U.S.,” Krebs said.

“BMW and Mercedes-Benz are headquartered just outside of New York. The city is the center of advertising and media, and it is where deals are made such as cooperative ventures as Cadillac is discussing,” she continued.

“Cadillac has been through a tough year of lower sales, including decreased sales of some of its newest cars, in a luxury car market that is booming. It’ll take more than moving the headquarters to New York to fix that,” Krebs added.

Finally, KBB senior analyst Eric Ibara, who specializes in analyzing residual values, examined how Cadillac’s leadership must make prudent decisions with this move ahead.

“Cadillac's engineers and designers have shown they are capable of bringing competitive products to market. However, the brand is discovering that this is not the only criteria for success in the luxury market,” Ibara said.

“Johan de Nysschen recognizes the need to rebrand Cadillac in a manner that reflects the new products in the showrooms and this move may help.  Still, it will take time to accomplish this and the transition period will be at least as critical to Cadillac's future success,” Ibara concluded.