GM's Focus on Brands Pays Off Amid Recall Controversy

By Jeff Bennett 

Cadillac luxury car sales show no signs of decline amid the auto maker's ongoing ignition switch recall, suggesting General Motors Co.'s biggest automotive brands may be sidestepping most of the recall fallout, a GM executive said.

"This is the good thing about having strong brands," said Cadillac Chief Marketing Officer Uwe Ellinghaus following a speech in New York on Tuesday. "The recall has been of little issue in customer discussions at least when it comes to the Cadillac brand."

For the past two years, the nation's largest auto maker has been striving to distance itself from its GM initials, choosing instead to focus marketing around its top brands--Chevrolet, Cadillac, Buick and GMC.

While media coverage of the troubled recall has focused on the vehicles and models involved--most of which are no longer sold or belong to discontinued brands such as Saturn and Pontiac--consumers would be hard-pressed to find GM logos in dealer showrooms.

In March, the first full month of sales following the ignition-switch recall, company's U.S. operation sold 4% more vehicles than a year earlier, a faster pace than rival Ford Motor Co. While Cadillac unit sales were roughly flat with the same month in 2013, Chevrolet, Buick and GMC were all higher.

Wall Street analysts and shareholders will be closely watching GM's April auto sales for any sign of consumers reacting to the steady flow of bad news. GM is at the center of several investigations of its handling of a recall of 2.6 million vehicles linked to 13 deaths. A year ago, the company sold 237,646 vehicles in the United States during April, an 11% increase over the same period in 2012.

Cadillac global chief Robert Ferguson is now spending most of his time working on Capitol Hill as the company maneuvers through the congressional process which includes answering legislator questions and responding to data demand from the National Highway Traffic Safety Administration.

Chief Executive Mary Barra intends to keep Mr. Ferguson in the public policy position and hand the Cadillac leadership position to Mr. Ellinghaus, people familiar with the matter said. He declined to comment on such a move and said he is currently there to help Mr. Ferguson.

"We are a team here and if he [Mr. Ferguson] is needed temporarily somewhere else then I am there to offer help," Mr. Ellinghaus said.

Write to Jeff Bennett at [e-mail]

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