If I were to pinpoint a specific year when the flagship Cadillac Division of General Motors lost its mojo (yet to be recovered), it would have to be 1981. Bad product planning choices and a catastrophic powertrain strategy conspired to deliver the unthinkable: Cadillacs were suddenly underpowered, much less reliable and increasingly out-of-style. The brand that had been a “no-brainer” choice for American status seekers no longer looked as compelling, with rivals closing in from all sides to lure away Cadillac’s customer base. Let’s go back to 1981 with some period reviews of Cadillac and key competitors to dissect how this disaster unfolded.
In reality, trouble had been brewing for years. Cadillac’s reputation for prestige, ultra-luxury and quality had been burnished mightily from the end of World War II through the 1960s. Cadillacs were flashy, expensive and exclusive—an overstated exclamation point on the American dream and a globally understood expression of wealth and power.
A subtle shift occurred as the 1970s unfolded, and Cadillac’s definition of “substance” changed from being about gravitas and top-notch materials to simply meaning “mammoth.” The brand was able to coast on its former reputation for glory, because the cars were still flashy and buyers had been well-conditioned over the years to view Cadillac as “the best” American luxury car. But “too much car” would prove to be a problem.
The gas shocks of the 1970s, Corporate Average Fuel Economy (CAFE) requirements and changing consumer tastes—toward efficiency and functionality—were all significant challenges for a brand that had built its reputation on hedonistic excess. To respond, Cadillac did initially make some smart moves to recalibrate its product line, including the Seville for ’75, the downsized DeVille/Fleetwood for ’77 and the downsized Eldorado for ’79.
Creating the world’s priciest Chevy Nova—aka the Seville—satisfied the growing demand for luxury cars with more manageable proportions. While in no way world-class, despite its positioning as being “Internationally-sized,” the Seville did maintain some important hallmarks that had come to define the Cadillac brand: it was very plush and distinctive looking (before GM started slapping the “formal roofline” on virtually the entire product line), it felt contemporary for the times, and it was quite expensive for what it was, thereby ensuring bragging rights for the “baby Caddy” at the country club.
GM’s 1977 downsizing program for its full-sized fleet was heralded as a brilliant move, and the corporation deserves a lot of credit for producing rational and well-executed versions of the traditional American big car. Cadillac might have been nervous about shrinking the scale of its C-Bodies, but the end result was well received. The market was ready for better big cars, including luxury cars, and Cadillac sold them by the truckloads. Plus, once again, the traditional Cadillac virtues remained intact. The DeVille and Fleetwood felt fresh and distinctive, had ample power with acceptable fuel economy (for a big Cadillac) courtesy of the 425 cubic inch V8, and the cars were cushy, trouble-free and set-and-forget easy. As Car and Driver pointed out in this review of the 1978 Coupe DeVille, “Surprise! Opulence can be fun.”
The all-new, downsized E-Body Eldorado for 1979 proved that Cadillac could incorporate up-to-date features like 4-wheel independent suspension, 4-wheel disc brakes, electronic fuel injection and front-wheel-drive into a luxurious, reliable package which accelerated and handled surprisingly well for a comfort-oriented American car. The ’79 Eldorado also looked every inch a Cadillac—and an exciting new one at that: in no-way did it come across as a shrunken mini-me version of its ultra-bloated predecessor, but rather a trim new take on Cadillac style.
So, initially at least, Cadillac looked to be on a path of correctly responding to a dramatically changing market, with more rational cars that still served up traditional Cadillac power, comfort and distinctive style. But with the impact of the 2nd Oil Embargo in 1979 hitting big cars hard, along with a tightening CAFE noose demanding ever better EPA fuel economy numbers, GM got caught like a deer in the headlights, and their resulting moves at the Cadillac division brought an end to the perennial golden goose.
That damage came into full view for 1981.
Car and Driver wanted to test the new Cadillac V8-6-4, which was the first use of variable-displacement technology by any automaker. So a dolled-up 1981 DeVille d’Elegance was put through the paces, and in the process a lot of Cadillac’s emerging problems were encapsulated. First off, let’s be clear—really big cars were really, really out-of-style in 1981. It wasn’t even the mediocre mileage that was the actual problem—if you were affluent enough to get a Cadillac you likely had the coin to fill the tank. Rather, the issue was perception: the biggest Cadillacs made you look gluttonous. Compounding matters was the “aerodynamic” facelift that had arrived for 1980 and continued thereafter, with the sloped hood, smoother sides and higher rear deck, made the cars look bigger and heavier than the ’77 to ’79 Cadillac C-Bodies, even though they actually weren’t.
So Cadillac was desperately fiddling with its V8 in the quest for any possible smidgen of additional efficiency. Displacement was dropped from 425 cubic inches down to 368 cubic inches for 1980, which brought the EPA mileage estimate up to 16 MPG combined, a 1 mile-per-gallon improvement compared with 1979. For 1981, the Rube Goldberg cylinder-deactivation contraption was added to the 368 V8, which eked-out one additional MPG in the combined EPA cycle. So, in theory at least, a 1981 Cadillac could go an extra 50 miles on a tank of gas compared to a 1979 Cadillac. With gas prices averaging $1.35 ($3.87 adjusted) in 1981, the cost-per-mile for a V8-6-4 was .08¢ (.23¢ adjusted) versus .09¢ (.26¢ adjusted) for the 425 V8. That was chump change for Cadillac customers. But what did impact them in the seat-of-the-pants was acceleration, which dropped from around 10 seconds 0-to-60 for the 425 V8 to around 12 seconds for the V8-6-4. Slower was never better in a Cadillac, especially for such a marginal mileage increase.
Plus, given that Caddy drivers would be more likely to floor the less powerful V8-6-4 just to get it moving quickly, mileage plunged. Car and Driver’s observed mileage was a mere 11 MPG, which was terrible for 1981. The results were even more embarrassing when compared with the 425 V8-powered Coupe DeVille C&D had tested in 1978, which had achieved actual mileage of 16 MPG, since the traditional large, lazy V8 didn’t have to work as hard to propel the huge, hefty car.
I always absolutely loved Car and Driver’s “Counterpoints” section back in the day, since the editors could be counted on to serve up unfiltered impressions. And some of those impressions were priceless. I still laugh out loud at David E. Davis Jr.’s description of the “whore’s drawers” interior. Jean Lindamood went for the jugular, and was entirely accurate in her assessment that the Cadillac’s chintzy interior, sloppy handling and jerkily pulsating V8 that was neither efficient nor quick hardly represented anyone’s “standard of the world.” And Csaba Csere noted that the big Caddy was a dying breed, with bad points that outweighed its good ones.
One juicy tidbit revealed in the Technical Analysis of the V8-6-4 was that Ford Motor Company tried—and rejected—the variable displacement technology since it wasn’t seen a delivering necessary benefits in exchange for the complexity. Unmentioned in the article but quickly discovered by Cadillac customers, was that the variable displacement system wasn’t ready for prime time, and was riddled with problems right out of the gate. Topping the list was that the de-activated cylinders would either be filled with too much or too little fuel, leading to gushing or gasping when the cylinders re-activated. Plus, the computing power deployed to operate the system wasn’t up to snuff and couldn’t respond quickly enough to driver inputs. Thus, the famous smooth, responsive Cadillac engine was turned into a surging, stuttering, sluggish lump and Cadillac dealer service bays were soon filled with irate customers. Longer-term reliability also proved to be dismal, as shall we say, performance did not improve with age….
One of the keys to Cadillac’s success through the years had been repeat purchasers. Owner loyalty and satisfaction were high, as was resale value. For many wealthy buyers it wasn’t enough just to have a Cadillac—you needed to have a new one. And for decades General Motors had the sense to keep the classic formula going strong so that each new Cadillac was felt to be an improvement over the one traded-in. All that came to a screeching halt in 1981 with the V8-6-4 (or the woefully underpowered 252 V6 or the shoddy, sluggish 350 V8 Diesel). Imagine trading in a 425-powered ’79 Cadillac for an ’81 model?!?! You’d be disappointed—and furious.
Plus, when this article was written, little did we know that the V8-6-4 would turn out to be a one-year-wonder for all models except the limousine. Cadillac quickly shelved the flawed V8-6-4 and pulled forward the under-developed, under-powered, unreliable and utterly underwhelming “High Technology” 4100 aluminum V8 for use in its big cars in 1982. Proof that things could indeed go from bad to worse for Cadillac, and those repeat customers lucky enough to miss a dismal V8-6-4 1981 model got saddled with something that was arguably even worse in ’82 (and beyond). Once Cadillac found itself of the slippery slope of subpar engines, the downward spiral accelerated quickly, even if the cars themselves didn’t….
In addition to the performance, efficiency and style problems, Cadillac also had a pricing problem in 1981. At $17,685 ($50,728 adjusted), the as-tested price on Car and Driver’s DeVille was pretty typical for a Cadillac at the time. But that price band meant the car was simultaneously too expensive and too cheap.
Let me explain.
For many affluent customers, it was hard to see the added value that came with the Cadillac badge, especially beginning in 1981 when Cadillac no longer offered any good engines. There were other GM C-Body options from the likes of Buick and Oldsmobile that offered comparable luxury with lower sticker prices and better engine/transmission combinations. Cross town rival Lincoln also became a better buy due to better powertrains. So the 1981 Cadillac had become over-priced for what it offered versus other domestics.
At the same time, Cadillac had fallen far behind in the snob appeal sweepstakes compared with rivals like Mercedes-Benz, who served-up a stratospheric reputation at nose-bleed prices. Plenty of rich people seek out signals to show just how much money they have, so being seen as someone who has lots to spend is perceived to be quite desirable. The higher the price of the car, the more vanity value provided. Relatively speaking, 1981 Cadillacs were dirt cheap compared to Mercedes-Benz models, which just didn’t cut it for people seeking to flaunt wealth.
To make my case, let’s have a look at some more road test summaries and ratings from Consumer Guide Auto Test 1981 to see how some very pragmatic testers evaluated Cadillac and some of its key competitors.
Since fuel economy was the name of the game in 1981, with smaller engines being seen as necessary, it’s no surprise Consumer Guide opted to test a Cadillac Fleetwood powered by the Buick-built 252 V6.
Bet they were sorry that they did: the 6-pot Fleetwood was painfully slow, with a zero-to-sixty time approaching 23 seconds. This was a Cadillac?!?! Not that the Oldsmobile-made (and problem plagued) 350 V8 Diesel would have accelerated any better…. Guess you had to get a V8-6-4 if you wanted to be sure your Cadillac could merge onto a freeway. Or you could go shopping for a Buick Electra or Olds Ninety-Eight.
Though the potent gas-powered V8s like the 403 and 350 were gone from GM’s C-Body roster at Buick and Olds by 1981, at least there was still a decent V8 on offer. The Olds-built 307 V8 was no powerhouse, but it was smooth running (no cylinder-deactivation hiccups) and bullet-proof (no early visits to dealers with brand new cars suffering poorly running engines). Plus, Oldsmobile and Buick offered something on their full-sized cars that Cadillac did not: a 4-speed automatic. Sad but true—the flagship division of General Motors stuck with the old 3-speed automatic for 1981 while its less expensive sister divisions got the newer, more efficient transmission.
Inside, if you wanted button-tufted loose cushion seats covered in polka-dot velour, you could get them standard on the Olds Ninety-Eight Regency, while you had to pony-up an additional $1,005 ($2,740 adjusted) for the d’Elegance package on the DeVille. Plus, at $10,761 ($29,343 adjusted) the starting price for a V8-powered Ninety-Eight Regency sedan was $3,086 ($8,415 adjusted) less than the starting price for a Sedan DeVille. So for value conscious buyers seeking traditional American luxury, GM’s own C-Bodies from Buick and Olds were a far better pick. The Cadillac simply cost too much for what was essentially the same car, but with a more complicated, less smooth, less reliable V8 and an older, less efficient automatic transmission.
It wasn’t just competitors inside GM that benefitted from Cadillac’s engine/transmission gaffes: cross-town rival Lincoln also found itself well positioned to woo away wreath-and-crest customers.
Earning a “Best Buy” designation from Consumer Guide, the Lincoln Town Car served-up traditional American luxury as expected, with no cylinder-deactivation gimmicks, dismal diesels or undersized V6 engines to be had. Every bit as opulent as the Cadillac, and similarly priced, the Lincoln proved to be a better value because of its no-fuss, tried-and-true 302 V8 and 4-speed automatic. Little wonder that Town Car sales soon began to surge as word got around about Cadillac’s engine issues—and Lincoln’s lack thereof.
So there you had it: for value-seeking luxury shoppers who wanted traditional American size and opulence, the Cadillac cost too much for what it offered. Cadillac wasn’t remotely the “best” anymore—it was actually behind rival offerings, making that historic price premium mighty hard to justify.
But what about the “money is no object” crowd? People wanting to show off with rolling expressions of their bank accounts were increasingly turning to imported brands. Cars from Mercedes-Benz and BMW were selling like hotcakes to the moneyed set, with sales rising smartly year-over-year even during the 2nd Oil Shock and subsequent recession. In fact, the tough times actually helped the imports significantly, since the wealthy wanted to look “frugal” and “loaded” at the same time. These imports sold for Cadillac prices (or in many cases far more), yet they were small, functional and well crafted versus being big and overwrought. As such, they defined the new tastes of the times, where “intelligence” (it’s so efficient and high quality) plus “stealth wealth” (that little car cost how much?!?!?) became the calling cards of the style-setters. For these buyers, a supersized Cadillac stuffed with chintzy materials was too ponderous, too tacky…. And too cheap.
So surely Cadillac, flagship of mighty GM, was going to develop a great answer for this new breed of status seekers, right? After all, the 1975 Seville had been an acceptable half-step in that direction and was very well received, so no doubt the successor to the 1st generation could move even more toward international excellence, to keep pace with the evolving tastes of super-premium buyers. Or not.
CC has chronicled the 2nd Generation Seville as one of General Motors Deadly Sins, but I think its almost impossible to overstate how deadly it really was for Cadillac. At a time when there was absolutely no question that rational, functional, efficient and aerodynamic cars were fast becoming the hottest trend in the automotive market, Cadillac went back to the 1960s instead.
That’s right, there’s the dated bustle-back from another time and another mindset. So it was quite a surprise to see that design language emerge in 1980 for the 2nd Generation Seville. It was the polar opposite of what the trendiest style-setters were seeking. And things only got worse for 1981, because the dastardly V8-6-4 or the weakling 252 V6 became the alternate engine choices to the standard 350 V8 Diesel. Ugh!
Since the Seville Consumer Guide tested for 1981 was brand new and in optimal tune, they found that the cylinder-deactivation was barely noticeable (just give it a few more weeks….). But the fuel efficiency wasn’t there, and the overall packaging and style of the car simply seemed out-of-touch with the needs of the 1980s. Because it was.
However, the bad news from Cadillac during 1981 did not end there. It actually got far, far worse.
Arriving in spring 1981, though technically listed as a 1982 model year product, the Cimarron represented another Deadly Sin on Cadillac’s list. Though it seems utterly unfathomable, GM somehow thought that they could attract upscale import intenders by merely rebadging a lowly Chevrolet Cavalier as a Cadillac Cimarron! Same crummy, weak OHV 4-cylinder, same generic Chevrolet styling inside and out. But the “Cadillac” had leather seats!!! And Cadillac badges!!! And standard air conditioning!!! Why BMW 320i intenders didn’t drop everything and run to their nearest Caddy dealer is beyond me….
See why I picked 1981 as the turning point when Cadillac went down the road to ruin?
Just as Cadillac’s grasp on its leadership position as the “must have” traditional luxury car was collapsing, another brand was emerging as the new King at the top of the American automotive food chain in 1981.
The pragmatic testers at Consumer Guide didn’t typically gush about cars, but there was one that truly earned their admiration: the all-new Mercedes-Benz 380SEL flagship sedan that arrived in America for 1981. Here was an impeccably engineered, thoroughly modern car that was simultaneously imposing—with the formal radiator grille swept back for aero-efficiency, stand-up hood ornament and sleek flowing lines—and efficient, with ample interior roominess and comfort wrapped inside a body that was a full foot shorter than Cadillac’s despite having the same 121-inch wheelbase. This car was the epitome of modern luxury and style, circa 1981.
And it was priced accordingly, carrying the shocking (for the time) price-tag of $44,298 ($127,066 adjusted). High prices ensured rarity and helped attract the attention of envious admirers, which of course was the whole point. True luxury was (and is) about exclusivity, not ubiquity. Mercedes understood that there was a growing group of American buyers who had money to burn for luxury goods, and they cleverly positioned and priced their brand at the top of the heap. Right in territory that Cadillac had dominated decades before.
Go back to 1961, and the Cadillac Fleetwood was one of the most expensive mass produced cars offered in the U.S. market. It was rare and coveted, and priced higher than any Mercedes sedan available in the U.S. at the time. Even the baseline Series 62 was pretty pricey, far higher than the entry-level Benz. But a decade later, that had changed dramatically. The Fleetwood was actually cheaper than its 1961 counterpart, while the Mercedes S-Class was far more expensive—and this was before the dramatic escalation in the value of the Deutschmark to the Dollar. And by 1981, the Fleetwood had a lower base price than the entry-level, bare bones Mercedes 240D. Sure the Mercedes prices were off the chart, but that didn’t stop sales. And it is interesting to note that even today, quite a few loaded super-premium topline sedans and SUVs sell in that $120,000 to $130,000 price band. Mercedes had found the ceiling for U.S. luxury vehicle pricing, and they mined it for all it was worth.
This isn’t to say that Cadillac needed to move aggressively upmarket to match the top Mercedes prices. But imagine what the flagship Cadillac could have been if it were priced at around $30,000 ($81,800 adjusted), featuring cutting edge powertrains that actually worked and higher quality interior materials.
There was another, shorter road test in the April 1981 issue of Car and Driver, which really proved to be a stark contrast to the Cadillac DeVille in that same issue. The 300SD was the Turbodiesel version of the S-Class, and it offered yet another example of Mercedes-Benz engineering excellence. OK, so the test car had issues, as David E. Davis was flummoxed—and disappointed—about a locking fuel-filler door that did not work properly (methinks that Davis’s intrepid female driving companion must have been none other than Jean Lindamood, as she would have undoubtedly had the gumption to solve the problem). As was typical for a Mercedes S-Class, the car wasn’t cheap, listing for $34,185 ($93,216 adjusted). But the 300SD was comfortable, loaded with features and drove brilliantly for a Diesel. With the turbocharger added to the 3.0 liter 5-cylinder Diesel, the zero-to-sixty time was 12.1 seconds—very nearly as quick as the gas-powered V8-6-4 in the DeVille. However, C&D’s observed mileage was vastly different: the Benz achieved 23 MPG compared to the 11 MPG delivered by the Cadillac.
Cadillac simply couldn’t compete. Its V8 performance was basically matched by the Mercedes Turbodiesel. The non-turbocharged Diesel offered by Cadillac as a $325 option ($886 adjusted) was significantly slower. Putting a turbocharger on GM’s V8 Diesel would have blown an already weak engine to bits, so that wasn’t an option either. Of course, unlike the Mercedes powertrains, none of the 1981 Cadillac engines would prove to be good enough for the long haul. Well into the 1990s, you’d be likely to see plenty of 1981 Mercedes-Benz models merrily puffing along, boasting high odometer readings and still robust bodies, while plenty of 1981 Cadillacs (with the V8-6-4, V6 or Diesel V8) would be awaiting appointments with the crusher at a junkyard.
The reality of Cadillac’s dire situation in the early 1980s wasn’t just chronicled for me on the pages of magazines. I actually had a front row seat to the decline and fall of Cadillac loyalty via the family of one of my high school friends. My buddy George (great name!) had lived the Cadillac life as a kid. His parents were dream customers for GM, as they were a “His-n-Hers” Cadillac buyers, keeping the cars for just 2 years and having one from each model year (either “His” or “Hers” as they alternated) so that there was always a new Cadillac in the garage every year.
But one of the unfortunate truisms in life is that oftentimes good things must come to an end, and that was true for both Cadillac and George’s parents’ marriage. Around 1982, George’s parents went through a very messy and nasty divorce. The new Cadillac gravy train stopped for “Her,” so she kept the one she’d had when they split—a 1981 Fleetwood Brougham, finished in Sierra Gold, and powered by the notorious V8-6-4—longer than her usual 2-year trading cycle. As was typical for cars with the V8-6-4, her ’81 Fleetwood turned out to be a stalling, stumbling mess. I remember George’s mother frequently seething: “he left me with a faulty Cadillac that doesn’t even run right.”
To add insult to injury, she loathed her ’81 Cadillac so much that she treated it terribly. To wit, the Fleetwood, though still very new, had a huge welt on the rear deck-lid where George’s mom had backed into something, but never bothered to get it fixed—emblematic of the fact that the Cadillac no longer earned her admiration and pride. Once the dust from the divorce had settled and George’s mom was moving on with her life, the wretched ’81 Fleetwood was ditched for a comfy, manageable and reliable Toyota Cressida.
As for “His” Cadillac, George’s father’s last was a 1982 Sedan DeVille with the dismal HT4100 V8, a woefully underpowered and unreliable slug of a car. That Cadillac didn’t even make it to the 2-year trade-in mark—it was gone in less than a year, replaced by—drumroll please—a brand new Mercedes-Benz 300SD.
It’s proof of an age-old truism in the high-end luxury car market: affluent buyers seek out symbols of prestige, quality, exclusivity and fashionable style, happily paying the prices necessary to get “the best,” with indulgence and extravagance being crucial. Cadillac had understood this desire and owned this dominion in the U.S. for decades, but once they lost sight of what this market really wanted, the brand’s fall was swift and severe. Mercedes grasped the concept of “excess” as desired by American luxury customers—and redefined it as excessive engineering for an excessive price. Bulls eye! Plus, the engineering excellence and rigorous quality standards produced great cars, even if they weren’t cush-mobiles in the classic American sense.
So where do things stand now, some thirty-plus years after the fall of the House of Cad? Despite GM pouring billions upon billions of dollars into “recreating” Cadillac, with repeated hollow promises that “this will be the new Cadillac that turns things around,” the brand is no closer to the pinnacle of the luxury market than it was during the collapse in the 1980s. While brands like Mercedes, BMW, Tesla, Land Rover, Porsche and Lexus are now synonymous with “the best” in the luxury market, Cadillac’s mission remains muddled. Is it the maker of wannabe BMW sedans? Wannabe Lexus soft-roaders? Or madly over-priced Chevrolet Tahoe/Suburbans? None of these options are the products of a market leader….
Last week GM announced that Cadillac boss Johan (Audi über alles) de Nysschen was shown the door, after his SoHo hipsters, forgettable nomenclature and behind-the-times product and technology strategy failed to deliver on the umpteenth attempt at a brand turnaround. GM’s pick for his replacement to lead Cadillac? Steve Carlisle, a GM lifer who started with the corporation in 1982, right when V8-6-4s were stumbling, the HT4100 landed with a thud and the Cimarron became the butt of jokes. Carlisle clearly knows how to navigate inside General Motors—we’ll see if he knows what it takes to navigate the treacherous territory of true global luxury brands.
As much as I’d like to see Cadillac return to greatness, I’m not holding my breath….