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Why Cadillac is willing to lose 43 percent of its dealers

Cadillac is offering about 400 dealers in the United States a lump sum of money to close down. That represents over 40 percent of Cadillac dealers in America. Offers start at $100,000 and top out at $180,000. The average offering is around $120,000. According to Automotive News, Cadillac chief Johan De Nysschen estimates it will cost the automaker around $50 million to close these dealers. Any dealer that chooses to remain open will have to submit to Cadillac's ambitious Project Pinnacle, which will divide dealers into incentive categories based on how many units they sell. "Every single Cadillac dealer will have the potential to earn significantly higher profits than they do today," says De Nysschen. Dealers have until November 21 to decide if they want to take the cash or submit to Project Pinnacle. A logical question: Why is Cadillac willing to spend $50 million to close down 43 percent of its dealers? First, GM's luxury brand has way more dealerships than it needs. Second, the 400 dealers with offers to shutter each sold 50 or fewer vehicles in 2015, representing just 9 percent of its sales volume in America. So, while closing these smaller dealerships may have a small initial impact on sales, it's not going to be a major hit to Cadillac. Related Video: News Source: Automotive News - sub. req.Image Credit: Gary Cameron / Reuters Cadillac Car Dealers Luxury Performance

Frustrated GM investors ask what more Mary Barra can do

DETROIT — General Motors Co Chief Executive Mary Barra has transformed the No. 1 U.S. automaker in her almost five years in charge, but that is still not enough to satisfy investors. Ahead of third-quarter results due on Oct. 31, GM shares are trading about 6 percent below the $33 per share price at which they launched in 2010 in a post-bankruptcy initial public offering. The Detroit carmaker's stock is down 22 percent since Barra took over in January 2014. After hitting an all-time high of $46.48 on Oct. 24, 2017, the shares have declined 33 percent. In the same period, the Standard & Poor's 500 index has climbed 7.8 percent. Several shareholders contacted by Reuters said GM could face a third major action by activist shareholders in less than four years if the share price does not improve. "I've been expecting it," said John Levin, chairman of Levin Capital Strategies. "It just seems a tempting morsel to somebody." Levin's firm owns more than seven million GM shares. Barra has guided the company through the settlement of a federal criminal probe of a mishandled safety recall, sold off money-losing European operations, and returned $25 billion to shareholders through dividends and stock buybacks from 2012 through 2017. GM declined to comment for this story, but the company's executives privately express frustration with the market's reluctance to see it as anything more than a manufacturer tied mainly to auto market sales cycles. GM's profitable North American truck and SUV business and its money-making China operations are valued at just $14 billion, excluding the value of GM's stake in its $14.6 billion Cruise automated vehicle business and its cash reserves from its $44 billion market capitalization. The recent slump in the Chinese market, GM's largest, and plateauing U.S. demand are ratcheting up the pressure. GM is one of the few global automakers without a founding family or a government to serve as a bulwark against corporate raiders. In 2015, a group led by investor Harry Wilson pressed GM to launch a $5 billion share buyback, and commit to what is now an $18 billion ceiling on the level of cash the company would hold. In 2017, GM fended off a call by hedge fund manager David Einhorn to split its common stock shares into two classes. Einhorn, whose firm still owned more than 21 million shares at the end of June, declined to comment about GM's stock price. Other investors said there were no clear alternatives to Barra's approach.

Ford C-Max Commercial Brings Cadillac 'Poolside' Ad Down To Earth

If we had tried to predict the first video response to the controversial Poolside video for the Cadillac ELR, we would not have thought it would center on compost. But, hey, it's always nice to be reminded that the real world is sometimes better than fiction. Instead of the chic swagger of 'Poolside,' 'Anything Is Possible' is all about getting dirty. The new short in question is called Upside: Anything Is Possible and it promotes two things: Detroit Dirt and the Ford C-Max Energi. As in the ELR ad, Ford's plug-in C-Max only makes an appearance at the tail end of the spot, but instead of the chic swagger of Poolside, Anything Is Possible is all about getting dirty. The ad stars Pashon Murray, co-founder of Detroit Dirt, which takes natural waste from around Detroit, composts it into soil and then spreads that around "forgotten parcels" of Detroit to create urban farms. Detroit Dirt gets its bio-waste from a lot of sources, including the Detroit Zoological Society (all that herbivore manure has to go somewhere), Ford and General Motors, but this particular ad was the idea of Ford's PR agency, Team Detroit. It was a frenetic shoot, filmed with an LA-based director right after a big winter storm blew through Detroit, and Murray couldn't be happier with the result. "This was Ford Motor Company pushing my story, letting me tell the story that I believe in," Murray tells AutoblogGreen. "I get to help push this car and I get to tell my story." She says that the Team Detroit and Ford had to agree on the message, "from my understanding, [YouTube] is where they wanted to start, not where they wanted to finish." The ad is already getting a positive response on Twitter, so we won't be surprised if it shows up in more places soon. "It's not saying Ford is better than GM. It's telling the story of a black woman who's working hard in Detroit." As Detroit Dirt has off-screen support from both GM and Ford, it's unsurprising to hear Murray say that the video "is not a rivalry thing." She notes that the ad agency Team Detroit came to her and offered to tell the Detroit Dirt story using the framework of the GM ad. "It's a parody on this commercial, but it's not saying Ford is better than GM," she said. "It's telling the story of a black woman who's working hard in Detroit." What is that story? It's about urban farming, recovery and recycling. Murray tells us that for the last seven or eight years, she's been dedicated to sustainability.