Delays mar rollout of redesigned Caddy Escalade

Dude, where's my Escalade?

Delays mar rollout of redesigned Caddy Escalade

Logistical snags and prolonged quality inspections at GM's SUV assembly plant in Arlington, Texas, have led to delays for the Escalade.
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DETROIT — Cadillac dealer Bill Wallace loves the reaction to the flashy 2015 Escalade that hit his showroom this spring: A dozen customers have plunked down deposits, and more are lined up with checks in hand for the redesigned SUV.

But Wallace is refusing to take additional orders for fear of aggravating customers.

“We can’t get firm delivery dates” from General Motors, says Wallace, owner of Wallace Cadillac in Stuart, Fla., who says he has seen four would-be buyers walk after weeks of waiting. “It’s hard to tell a guy who is waiting for a $75,000 car that I have no idea when he’ll get it.”

Cadillac dealers nationwide are frustrated over the choppy rollout of the ’15 Escalade, the first redesign of the luxury barge in eight years.

Logistical snags and prolonged quality inspections at GM’s SUV assembly plant in Arlington, Texas, have led to delays of a month or more from the time Escalades roll off the assembly line to when they show up at dealerships. That’s roughly triple the usual wait time.

Kurt McNeil, head of GM’s U.S. sales operations and interim Cadillac sales chief, told Automotive News that a lengthy quality-assurance process on some interior parts, such as leather that’s cut and sewn by hand, contributed to the delays.

“We deployed more people to Arlington to speed up the analysis process,” McNeil said in an e-mailed statement from a GM spokesman. He said GM “added many more trucks to the distribution system to increase shipping capacity.”

McNeil said “dwell” time — the time from assembly to dealership delivery — was two weeks as of late last week, down from a four-week average earlier in the summer. He said it should be down to one week by Sept. 1.

GM also has struggled with the logistics of prioritizing deliveries of presold Escalades vs. other SUVs built at Arlington, the redesigned Chevrolet Tahoe and Suburban and GMC Yukon and Yukon XL, according to two people familiar with the matter. In some cases, SUVs set aside for quality inspection have been stuck for weeks in holding lots as workers tried to clear hundreds of other trucks ahead of them, the sources said.

Losing patience

Dealers say the delays have been especially irksome because they have inconvenienced an influential, high-rolling clientele who haven’t blinked at the big price tag, which went up about $8,000 from the outgoing generation, to $72,690 for a base model, including shipping.

“These are some of my most loyal customers,” says Todd Snell, CEO of Snell Motors Inc., a Buick-GMC-Cadillac dealer in Mankato, Minn. He said a few waiting customers lost patience and went outside his market to buy their Escalades.

Excluding the phased-out EXT pickup, Escalade sales more than doubled in July, to 3,894. Through seven months, sales rose 27 percent, to 14,300.

Inventories are slim: 27 days for the Escalade and 28 days for the Escalade ESV long-wheelbase version.

The SUV was the best performer through July for Cadillac, which overall declined 2 percent amid sagging sales of the ATS compact sedan (down 21 percent) and XTS large sedan (off 24 percent).

Still, dealers such as Snell say the delivery bottleneck is keeping a lid on Escalade sales.

Snell said he normally keeps 10 to 15 Escalades on his lot. As of late last week, he had none on the ground and had sold only one 2015 model — he hasn’t even test driven one because of the scarcity. He said one customer’s vehicle was held up at Arlington for two months, according to information from GM’s tracking system.

“I commend [GM] for wanting to get them right,” said Snell, who also stopped taking preorders. “But at the same time, we have customers who think we’re lying to them. We tell them it’s been built, and then weeks go by.”

McNeil acknowledged that “communication was a challenge” earlier in the Escalade launch. But he said GM armed its field staff with spreadsheets of every order to help dealers track the progress of their vehicles.

“It did take us a while to get there, but we’ve made major enhancements,” McNeil said.

Not an allocation issue

Dealers commonly gripe about not being able to get enough inventory during hot vehicle launches. But normally their beef is with allocation: They might not have been earmarked for as many units as larger dealerships or ones in other markets.

The problem with the Escalade launch is different because it has snagged built-and-spoken-for vehicles that are simply taking too long to show up.

“We have orders we placed in February and March that still aren’t filled,” says a manager at one of the nation’s highest-volume Cadillac stores. “If we got 20 in a shipment this morning, they’d be gone by this afternoon.”

Wallace, the Florida dealer, says he believes the launch will be “an enormous success” once the distribution bugs are ironed out because customers think the truck “is spectacular. They get inside and just say, ‘Oh my God.’”

GM “has taken care of the hard part,” Wallace says. “The ball is at the goal line. They just need to get me the car.”

You can reach Mike Colias at mcolias@crain.com.


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