Story Comments

Great article. I am looking forward to buying into the 25 billion IPO coming for the new GM in the next couple of years.

In the last week I have started nibbling into distressed GM bonds hoping that they will translate into an initial equity position.

Mr. Stewart,

There is an important issue with Cadillac that the media so far has not picked up on.

The Cadillac in the picture in the WSJ is a four door version. If it was a two door it would be worth much, much more money.

Cadillac has long history of successful two door models. Some like the two door version of the 1960 model in the picture were two door versions of a four door car. And some were separate models, like the Coupe DeVille and the El Dorado.

Cadillac has not had a two door regular sized car in years. Back in January 2008 at the Detroit Auto Show Cadillac showed an attractive prototype two door version of their successful and highly regarded midsized CTS. In March 2009 I went to the Dallas Auto show and asked the Cadillac representatives about its release schedule. They said it had been postponed and that they were tired of people asking about it. They showed me the brand new CTS-V, a 556 horsepower car that gets 16 mpg with alm...(Read more of this comment)ost no potential market. Twelve months later it was the same. It was postponed again and they were really sick of people asking for it. This time they had a new station wagon version; Cadillac has never had a successful station wagon.

The question is why they continue to postpone a car that would be relatively simple to gear up for and would sell very well and instead go to the trouble and expense to design and engineer cars that almost no one would even consider buying. The only reason I can come up with is that they want to wait till after being bailed out thought bankruptcy, then put into place executive bonus and stock option plans, and then bring it to market.

Philip Burk
Plano, TX

(Show less of this comment)

I loved your reference in your column in today's Journal about getting the keys to the Cad for your high school prom. I had an uncle who bought a new Chrysler New Yorker every two years. He visited us in our housing project in Brooklyn in his brand-new '59 New Yorker. Knowing that I was a car-crazy kid, he let me drive it around the neighborhood—right past the candy store where the older guys hung out with their Bonnevilles and Olds Super 88's. As Andy Warhol said, everyone will be famous for 15 minutes…

Regarding GM and Cadillac: Packard was the prestige American luxury car before World War II. Cad kept their hand in by allowing some of their customers to buy regular and specialty hearse, ambulance and flower car chassis and have the bodies custom- built by Saoutchick, Fleetwood and Fisher. But after the war, Cad pushed past Packard through innovation and smart marketing. The '49 Cad (and Oldsmobile) had America's first high-compression, pushrod overhead valve V8's, w...(Read more of this comment)hich created a sensation. Cad pioneered the 'fishtail' designs—a risky business that caught on because it personified what buyers thought of as 'modern' and 'stylish,' and was mimicked by all other makers. Cad also offered GM's four-speed Hydra-Matic fully automatic transmission, which was miles ahead of the competition. Incredibly, Packard didn't offer a POHV V-8 until 1955, the same year they finally discarded their original postwar body design in favor of a Fifties look. Cad's very success threatened to dilute its exclusive, luxury image. So GM brilliantly introduced the Eldorado, a high-end Cad. For a couple of hundred dollars worth of additional chrome and 2x4bbl carburetors in the engine compartment, the Eldo commanded a premium of several thousand dollars. More important, it gave the snobs a differentiator over the parvenus who bought standard Cads as a status symbol.

But the market has passed by Cadillac. Cad frittered away its brand power during the Seventies and Eighties, when it became either a warmed-over Chevy or a gold-leaf compact car. No consistency, no commitment. Today's luxury buyers favor Audi, BMW, Mercedes and Lexus because they are assured that their beloved marques are consistent in delivering what they want. Audi reliably builds the best-performing luxury AWD sedans. BMW is always the choice for sedans with a sporting quality—even the big 7-series is a 'driver's car.' Mercedes sets the standard for high-performance boulevard cruisers. And Lexus always delivers the best value in quiet, conservative, smooth-riding luxury sedans. If you read the car aficionado publications, you'll soon see that when those marques veer from their core competency, they fail in comparisons with others. Audi makes a high-end sports car that's well regarded, but its AWD compromises handling. BMW's Z-series sports cars consistently fail to best Porsche because they aren't real sports cars—they're 3-series sedans in a sports car body. Mercedes' AMG cars have gigantic horsepower and are stupid-fast in a straight line. But they fall short in steering and handling because, at their core, they're breathed-upon boulevard cruisers. And Lexus has fallen short with a variety of 'sports' models that are essentially the company's 4-door sedans with coupe bodies and louder mufflers.

In an attempt to shed its old-person image, Cadillac has introduced an ultra-high-performance sedan, the CTS-V, which sports a supercharged V8, 6-speed transmission and other performance tweaks. The aficionado magazines sweat to compare it favorably to BMW's M5. But it's basically a Malibu with a tuned-down Corvette Z06 engine. No discerning buyer with the money to afford either car would choose the CTS-V over the M5. One has brand power, the other doesn't.

--William S. Weiss

(Show less of this comment)

Thanks for the sane view of an insane series of events leading to the demise of GM as we knew it. But the new GM will be like the new Chrysler after its bankruptcy unless it can enter a new paradigm such as is being done by a start up called Better Place (http://www.betterplace.com/). Unfortunately there are probably too many constraints on the old GM to morph into something so revolutionary different. It will probably just stumble along a parallel path.