Singing the Hometown Blues: Brands Bolt the Midwest for New York

St. Louis and Detroit long have had a lot in common as perpetually downtrodden buckles on the Rust Belt, capitals of traditional industries (autos and food processing), and strong outposts of provincial Midwestern thinking and capabilities. Now they share something else: abandonment by their most beloved corporate citizens.

The CEOs of Anheuser-Busch’s and Cadillac’s parents, AB InBev and General Motors, can’t be happy about the backlash, but their charges brought it on themselves.

In Detroit, new Cadillac CEO Johan de Nysschen has been getting rhetorically flayed for announcing that the GM luxury brand will be moving its administrative, sales and marketing headquarters to SoHo in New York City so that its staff can soak in the trendy, upscale vibes and rub shoulders with more truly premium-brand consumers than they do in Detroit. GM CEO Mary Barra obviously approved the move.

“Cadillac’s staff will be soaking up the trendy, upscale vibes of SOHO and rubbing shoulders with premium-brand consumers.”

Meanwhile, the CEO of Anheuser-Busch parent AB InBev, Carlos de Brito, has been hearing from the locals about his company’s decision to move the North American headquarters for its sales and marketing functions from St. Louis to New York. In this case, the company cited not the high count of luxury consumers in Gotham but, rather, “proximity to marketing partners” such as the offices of pro-sports leagues and “greater exposure to develop trends in a diverse, urban center.”

Ouch, that hurts, if you’re a denizen of Detroit or St. Louis or, really, anywhere in Flyover Country, as those company chiefs also strongly imply that the corporate hometowns in the heartland lack enough people with panache and creativity to elevate the brands and extricate them from their difficult positions.

Cadillac’s sales have declined this year as its worthy line of new products suffers from the lack of a cohesive and compelling brand message and presentation, while AB InBev continues to struggle with business in an overall beer market that remains flat—while any growth is going to craft and small-label beers that appeal to independently minded millennials.

So there are two issues here: what’s best for Detroit and St. Louis, and what’s best for Cadillac and Anheuser-Busch. The reality is that it makes a lot of sense for Cadillac and AB InBev marketers to leave their cities to find ways to become more robust brands overall.

The environment surrounding such initiatives—in this case, luxury-car marketers who must learn how to appeal to high-net-worth individuals much more effectively than they have and beer marketers who must strengthen some strained marketing relationships—can play a huge role in the success of the operation.

It smarts for Detroiters and citizens of St. Louis to admit this, but if the brands succeed, these and other markets may be better off in the long run.


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