Automotive History: 1997-2001 Cadillac Catera – GM’s Deadly Sin #29

(first posted 8/9/2011)     Lots of people rightfully think of Cadillac as the All American car.  Founded in the U.S.A., long called the standard of the world, no other country could be the home to a true Cadillac.  So when GM announced a new kind of Caddy to the world in mid 1996, car watchers everywhere wondered if a car whose DNA came from another continent could ever be the real thing.  Their worry was not misplaced.  For only the third time in its long history, Cadillac imported a car from Europe and the results were disastrous.  The Cadillac Catera was little noted or long remembered, but its failure forced GM to do what had been unthinkable just a few years earlier – start over with a clean sheet of paper and finally save its luxury division.

It just seems like just yesterday that GM’s top rung was in what looked like terminal decline.  Starting with the V-8-6-4 fiasco in the early eighties, bad diesels and the rise and rapid fall of the Cimarron, Cadillac seemed to have lost its way and purpose with very little hope of getting it back.  The make struggled through the early 90’s as company execs looked helplessly, uncomprehendingly at the rise of the Japanese luxury makes and rightfully wondered if they were going to follow their old rival Packard to the corporate bone yard.

The division was stuck in a trap largely of its own making:  By trying to appeal to the same demographic that had always bought Cadillac, they were losing out on the replacement customers that were so vital to maintaining a viable business.  In a sentence, old customers eventually die and you have to replace them or risk your viability.  Those new customers, the late 30’s – late 40’s “late boomers” increasingly thought of Cadillac (and to a lesser degree Buick and Olds) as “dad’s car”. Or even worse, “granddad’s car”.

By the mid ’90s Cadillac was locked in a no-quarter death struggle with its old rival Lincoln for the top spot on the sales chart, but the real threat was from the Japanese.  Caddy brass understandably cast a worried eye to the east, as the buy up makes had come from nowhere to within about 30,000 units of the standard of the world in just a couple of model cycles.  Lexus, Infiniti and Acura buyers were younger, more affluent and their tastes ran more to “sport luxury” than ostentation and pretension.  Mercedes and BMW also claimed a large piece of the high end market, but high prices and refusal to adapt their autobahn cruisers to American sensibilities placed a hard ceiling on their market penetration.

To be sure, Caddy had stepped out on a limb before to try to woo a new kind of buyer.  The history of the “Cimarron by Cadillac” is well known and has already earned deadly sin status in this space as a cynical attempt to trade on the good (but then fading) name of a car known as a quality product.  It’s hard to overstate the damage that the Cimarron did to Cadillac’s reputation with its core customer during its seven year run in the company’s lineup.  By the time that the Cimarron was shown the door in 1988, sales across the entire line were just over 152,00 units, about 60,000 behind Lincoln and dropping alarmingly.

The next stab at a change of DNA involved a Rube Goldberg assembly scheme and a body designed by Pininfarina that hit the market with a thud in 1987.  It was the Allante, and if ever there was a metaphor for GM’s deaf, dumb and blind market comprehension, this was it.  The fact that the Allante had to be designed and partially assembled in Europe spoke loud and clear that the solons in corporate HQ had lost touch with their target buyer (and economic reality).  The wildly overpriced, bland and sloppy handling Allante hung on for seven model years, averaging about 3100 copies per annum.  Even with its towering $54,000 sticker price, buyers got leaky roofs, troublesome Northstar engines and sluggish acceleration.  To beat it all, GM lost money on every Allante ever made.

(By the way, the Allante was the second import that Cadillac attempted. The first was the Pininfarina-built Eldorado Brougham in 1959/60. It sold about 200 copies in two model years.  Its $13,000 MSRP was simply stratospheric for the times.)

Between the demise of the Allante (which was never really competitive in its class) and the introduction of Catera in 1997, Cadillac had only the Seville to cover the vast sport/luxury space that was becoming the high stakes prize in the North American car market.  The Seville (then in its fourth generation) had debuted in 1992 to good reviews and strong sales and was overtly much more “international” in character than the model it replaced.  It won Motor Trend’s Car Of The Year award in its initial run and regularly turned up in the “ten best” lists of the buff magazines.  Cadillac management sensed that the way of the future was to play up handling, road manners and refinement rather than plushbottom luxury and the latest electronic playthings.

If an americanized copy of a European touring car was good, why not go one better and bring back the real thing?  In theory, this sounded fine. Crisp road manners and a somewhat smaller engine might just capture the buyer that was considering an entry level BMW or a Lexus ES or GS series. Now, all GM brass had to do was find the right car. With a stable of eurosedans at Opel and Vauxhall to choose from, what could go wrong?

In a word, everything.  GM summoned the Opel Omega from the Germany (where it had been marketed as an executive car), stuck the usual oversize Caddy badges on the outside and then turned on the marketing machine.  A goofy, contrived ad campaign featured a slightly sinister looking duck that assured buyers they were renegades that played by their own rules and Cadillac had just the car they needed to buck the establishment.  Among stupid ad slogans of the last 50 years, “The Caddy That Zigs” certainly deserves a high place as an all-time worst effort.  It was hard to escape the hype:  GM bought huge flights of TV and radio spots urging customers to “lease a Catera”.  This had the effect of making what was an overpriced car seem more affordable.  The ads seemed to run in a continuous loop during sports events and prime time.  But those ads sowed the seeds of trouble, as we will see.

Once they climbed behind the wheel, customers found that the car itself was a flawed product on too many levels.  The outside looked way too much like a pedestrian Chevy Malibu (new for ’97) to ask nearly $20,000 more with a straight face.  In fact, the manager of a local multiline GM dealership has told me that they had to move the Cateras and ‘Bu’s to the opposite ends of the lot in those days because they were too similar looking and people couldn’t tell them apart from more than 50 feet.

But the lookalike problem was small potatoes compared to the numerous mechanical issues baked into the Catera.  Number one was performance.  It’s kind of hard to imagine yourself streaking down the autobahn with BMW’s, Audi’s and Porsche’s when you can’t outrun a workaday Camry.  The cars 3800 pound mass taxed the 3 litre L81 V6 (sourced from Britain, of all places, further driving up costs) and provided no snap, no excitement for its disappointed owners. GM’s French sourced 4L 30-E automatic was hardly strained driving the (rear) wheels.

But that’s when it ran, which was far too seldom for most buyers.  It’s possible that the Catera logged more miles behind a tow truck than it ever did in over the road driving.  The most common problem was the sudden failure of the timing belt tensioner pulley.  When it let go, bent valves and flying rods meant a quick and expensive death.  In the best GM tradition, Cadillac tried to look the other way, which sent a lot of furious owners running to their lawyers.

Eventually, this episode led to an expensive recall, which proved to be just the tip of the iceberg.  As technical service bulletins started piling up reflecting the cars numerous problems, sales began dropping and never recovered.  Worse for GM, the earlier push for leases meant that the cars mechanical woes came back to haunt the company when the leased lemons came back to the dealer.  Not only did lessors not want to buy their troublesome rides, but they frequently proved hard to sell off-lease because of the car’s known issues.  This further depressed resale values which had never been that strong anyway.  The internet was spreading the word that Caddy had produced a lemon and buyers were just not willing to risk nearly $40K on a potential headache.  By the end, Cadillac was selling about 5500 Cateras a year.  The car was doomed.

Oddly enough, for a car that arguably had been as bad for Cadillac’s image as the Cimarron, the Catera story has a happy ending.  The Omega was sold in Brazil as a Chevrolet Omega and did good business there, lasting until 1998.  The basic chassis would return to the U.S. as a Pontiac GTO for three seasons and GM peddled the donor car as a Holden Commodore down under.  But the best legacy of the Catera here in the states was that it finally woke GM up to the fact that to save Cadillac, the old playbook wouldn’t do.  The replacement for the unloved Catera would be the CTS in 2002.  This was a world class car that Cadillac could finally be proud of.

Its knife edge styling, nifty interior and crisp handling owed nothing to its antecedents and helped change Caddy’s image as a car for fuddy duddies. The CTS continues to this day and looks good even now.  It’s styling and features became the template for Cadillac’s resurgence in the ‘aughts.  The Catera is all but forgotten.