I read with great interest the editorial by my fellow SUNY Geneseo alumnus Curt Smith ("What’s in car styling? A profitable Detroit," June 2, 2019, page A6), commenting on an article in the Wall Street Journal (Mike Colias (May 14, pages B1 and B5) that I also read. We agree with Colias’ explanation for the weakness of Cadillac in the fight against the foreign luxury brands and his prediction of even more sales woes for Cadillac’s newest lineup of me-too CUV and copycats “X” model names. But Curt and I also cite additional reasons why Caddy deserves an “F” grade in marketing.

GM was the creation of William Durant and his successor, the legendary Alfred P. Sloan. Durant’s strength was buying up other car companies. But it was the “marketing genius” of Sloan and his successors who led to Cadillac’s recent problems. They made two key mistakes: (1) locating Cadillac dealerships away from areas where the wealthiest Americans live; and (2) basing Cadillac’s marketing on Sloan’s erroneous “ladder of success” — that younger, cash-strapped buyers start with a Chevrolet and then progress up the rungs on an unseen but real psychological “ladder” to Pontiacs (after their first promotion), Oldsmobiles (VP), Buicks (Senior VP), and finally to Cadillacs. Sloan believed that consumers wanted to use their cars to signal their newfound wealth and social status to envious neighbors. But that bubble burst when word got out that cars on the upper rungs — underneath their fancier hoods, interiors and soaring fins — cost just pennies more to make than Chevys! That was “then” and this is “now.”

Just before my retirement from Montclair State University, I completed a study of sales and marketshare trends among luxury car brands in the U.S. market. What I learned then is just as relevant today. In 2002, only a dozen years after their launch in the U.S. market, the three Japanese luxury brands had already surpassed Cadillac (GM) and Lincoln (Ford). I studied a dozen-plus possible factors, but just two combined to explain more than 80% of sales in America: (1) where Japanese companies located their new luxury dealerships and (2) major changes in where America’s wealthiest families lived.

The Japanese decided to establish entirely new brands rather than just dress up the top trims on their bread-and-butter Toyota Camry, Honda Accord and Nissan Maxima sedans. Even more importantly, they insisted that their new luxury dealers build separate showrooms, preferably not even next door to their down-market brands. Their three new luxury brands hired different advertising agencies and spent millions on carefully researched new brand names, tag lines and signage. They also carefully located their upmarket dealerships among the highest concentrations of wealthy families. Cadillac sales sagged because GM stuck with legacy (existing) dealerships, mostly opened just after or even before World War II. Wealthy Americans had long-since moved! And to save money they made the related mistake of co-locating Caddy showrooms with their Buick, Oldsmobile, Pontiac and even “aspirational” Chevrolet dealerships. American consumers weren’t dumb, As they kicked the tires on new GM cars. (Trucks were not much of a factor back then, and SUVs didn’t even exist until plucky little Subaru came along in 1996 with their Outback — truck strong; car friendly — AWD wagons.)

Both Curt Smith and I show that Japanese auto executives paid more attention to the U.S. auto market than GM, Ford and Chrysler. Not for nothing, many senior Japanese car execs earned their MBAs at top US universities! Bottom line: Cadillac may have some slick new models, but GM is still making the same mistakes.

About the quote in the headline: This controversial phrase was originally attributed to then GM president Charles Wilson testifying before a Senate Committee. But a further check revealed that he had actually said “For years I thought what was good for the country was also good for GM.”

Dr. Paul Scipione (Professor Emeritus of Marketing, Montclair State University; Professor Emeritus of Business, SUNY Geneseo), is the author of ten books, most recently "A Nation of Numbers" (2015), the definitive history of the Market Research industry. Scipione’s automotive clients included Chrysler (final concept testing on the Plymouth Horizon and Dodge Omni, both VW Rabbit wanna-be’s) and the late John DeLorean (test the concept of a male lifestyle magazine). Scipione also directed research that led the FTC to mandate informational window stickers on all new vehicles and energy use stickers on home appliances. In 2017 Scipione retired to Canandaigua. His author website can be found at nationofnumbers.com.