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T HE NEW YORK TIMES INTERNATIONAL EDITION WEDNESDAY, AUGUST 28, 2019 | 5

Business

Remember when President Xi Jinping

of China was the “enemy”? That was so

Friday. As of Monday, according to Pres-

ident Trump, Mr. Xi was “a great leader”

and a “brilliant man.”

What about that edict by Mr. Trump,

who “hereby ordered” American com-

panies to leave China? Three days later,

he was positive he would get a trade deal

and, if so, then firms should “stay there

and do a great job.”

Mr. Trump spent the weekend in

France insisting that he was not having

a debate with his fellow world leaders,

but at times it seemed as if he was hav-

ing a debate with himself. Day by day,

even hour by hour, his approach to the

trade war with China, the most conse-

quential economic conflict on the planet,

veered back and forth, leaving much of

the world with geopolitical whiplash.

If he seemed all over the map, he

made clear on Monday, as he wrapped

up days of diplomacy, that the world

would just have to get used to it. He likes

leaving negotiating partners, adversar-

ies, observers and even allies off bal-

ance.

“Sorry!” he told reporters, sounding

anything but apologetic. “It’s the way I

negotiate. It’s the way I negotiate. It’s

done very well for me over the years,

and it’s doing even better for the coun-

try.”

The way he negotiates at times in-

volves facts that may not be facts, state-

ments that may not have been said and

episodes that may not have occurred.

And at times, he denies saying what he

has said.

On Sunday, he said he had “second

thoughts” about escalating the trade

war with China, only to have staff mem-

bers later insist that his only regret was

not escalating it more. By Monday

morning, he was ratcheting back the

rhetoric and predicting a deal with Mr.

Xi, whom he pronounced a “great

leader” four times.

To explain his renewed optimism, he

cited two phone calls he said the Ameri-

cans had received from the Chinese

seeking to resume official negotiations.

China, however, failed to confirm any

phone calls, and Treasury Secretary

Steven Mnuchin then said the adminis-

tration had been communicating with

Beijing’s top negotiator “through inter-

mediaries.”

But within a few hours, Mr. Trump,

who when challenged prefers to double

down rather than back down, was insist-

ing that not only were there phone calls

but “numerous calls.”

Investors placed bets collectively

worth billions of dollars based in part on

their analysis of his comments, which

came shortly before world markets be-

gan reopening after the weekend. That

may have been the point, to calm the wa-

ters.

And yet even some policy veterans

who are generally supportive of the

president find his scattershot approach

G7 reversals

by Trump

knock world

off balance

He defends his swerves

on China trade, saying,

‘It’s the way I negotiate’

BY PETER BAKER

NEWS ANALYSIS

BIARRITZ, FRANCE

T RUMP, PAGE 6

Few American brand names have ever

achieved the stature of Cadillac, which

was once so closely identified with ex-

cellence and status that it became short-

hand for anything that was top of the

line. And few brands have fallen as far.

Cadillac rose to prominence a century

ago as the pinnacle in General Motors’

“ladder of brands” — the ultimate desti-

nation as car owners prospered and

moved up from Chevrolet, Oldsmobile

and Buick to demonstrate their success

in life.

But by the 1970s it struggled with

quality and failed to keep up, as the defi-

nition of automotive luxury shifted from

big, spacious cars with tail fins to Ger-

man-engineered performance sedans.

Cadillac became known as a “grandpa”

car brand. It now trails far behind Mer-

cedes-Benz, BMW and Audi on a global

basis, and last year ranked sixth in lux-

ury vehicle sales in the United States.

“It’s almost like the brand is stuck in

time,” said David Placek, president of

Lexicon Branding, a marketing firm

that develops brand names and strat-

egies.

General Motors has tried for more

than two decades to restore Cadillac’s

standing at the top of the automotive

world, with little sustained success. In

2015 it moved Cadillac’s headquarters to

the SoHo district of Manhattan, aiming

to immerse those shaping the brand in

the kind of upscale urban setting that is

a prime target for high-end products.

The image-making, however, wasn’t

backed up by new cars that turned

heads in the crowded luxury segment.

And Cadillac again missed a shift,

rolling out sedans as consumers flocked

to S.U.V.s.

“Moving to New York was wishful

thinking,” Mr. Placek said. “To get their

edge back, it has to be all about product

development first.”

G.M. embarked on the latest turn-

around a year ago, when it moved the

headquarters back to Detroit and

named a new Cadillac president: Steve

Carlisle, a Canadian engineer who has

been with G.M. since 1982.

“It takes several things to come to-

gether to be able to revitalize the brand,”

Mr. Carlisle said while at the wheel of a

CT6 sedan zipping along Interstate 96

near Detroit. “If you’ve been off people’s

radar screens, which we were, they

move on to other manufacturers. We

have to get back on their screens.”

The challenges are daunting. Cadillac

is now in the midst of another reboot at a

time when Tesla’s products and other

electric cars are becoming the standard

for luxury vehicles.

In some ways, Cadillac doesn’t really

compete with other luxury brands. Cad-

illac buyers most often trade in Chevys

and Fords; rarely do they trade in Ger-

man makes.

Almost 40 percent of Cadillac buyers

are older than 65, compared with 20 per-

cent for Audi, according to Cox Automo-

tive.

Mark Reuss, G.M.’s president, has

said Cadillac had one last chance to pull

off a comeback. And under Mr. Carlisle,

it is betting on technology, something

that distinguished Cadillac in its glory

days. Under his predecessor, G.M. spent

heavily to develop engines to be used

only in Cadillacs. One of them, a 550-

horsepower V8, became available this

year — at a time when electric vehicles

are captivating luxury-car buyers. Now

Cadillac plans to phase out combustion

engines in favor of electric models.

Within six to 10 years, Mr. Carlisle said,

Cadillac’s entire line will be electric.

Mr. Carlisle, who gives a distin-

guished look with a head of close-

cropped, silver hair and silver goatee,

demonstrated another one of the selling

points he is counting on: the Super

Cruise driver-assistance system. Using

radar and cameras, it is able to pilot a

car on divided highways. Drivers don’t

even need to keep their hands on the

wheel. As long as they look straight

ahead — an infrared camera monitors

the eyes — Super Cruise does the steer-

ing, braking and accelerating as needed.

Such systems could gain wide appeal

because they can make driving safer,

and can make long highway drives less

taxing.

As the Super Cruise system slowed

the CT6 to keep a safe distance behind a

silver Chrysler, Mr. Carlisle ticked off

what he sees as the progress that Cadil-

lac is making. In China, now Cadillac’s

largest market, its sales are strong and

growing, although car buying there over

all is beginning to slow. Two new sport

utility vehicles have arrived in the line-

up, addressing an urgent need.

Dealers are pleased with the addi-

tions. “We were on the short end of the

stick for many, many years,” said Daniel

Jobe, president of Capitol Cadillac in

Greenbelt, Md. With the new S.U.V.s in

showrooms, he said, “I think Cadillac is

going to have a very strong second half

this year.”

Last stand for Cadillac?

Clockwise, from above: A Cadillac CT6 in Detroit. Although it is equipped with the Super Cruise driver-assistance system, the model’s sales have fallen 60 percent this year, and

General Motors may halt production; Steve Carlisle, Cadillac president, driving the CT6 with no hands on the steering wheel; a 1964 ad touting Cadillac’s climate control features.

NICK HAGEN FOR THE NEW YORK TIMES

DETROIT

A storied brand hopes

to win back luxury buyers,

but the odds are daunting

BY NEAL E. BOUDETTE

C ADILLAC , PAG E 6

APIC/GETTY IMAGES

ELAINE CROMIE FOR THE NEW YORK TIMES

Moxy and Motto. Autograph, Avid and

Alila. Edition, Element and Even. Big

hotel management companies have

been acquiring or inventing new brands

at a dizzying pace in the past several

years.

But as the long bull market shows

signs of fatigue, some industry analysts

are starting to ask: What will become of

all these upstart brands when the econ-

omy sours?

“The hotel industry historically has

been very cyclical,” said Flo Lugli, prin-

cipal of Navesink Advisory Group, a

travel technology consulting firm. “It’s

not a matter of if, it’s a matter of when

the downturn will happen.”

The major hotel companies, including

Marriott International, Hilton World-

wide Holdings, Hyatt Hotels Corpora-

tion and Wyndham Hotels & Resorts,

have had all sorts of reasons to add

brands, starting with the changing

tastes of travelers, particularly younger

ones, who no longer want the cookie-cut-

ter sameness that was once the indus-

try’s strong suit.

“The uniformity of brands has actu-

ally become a negative,” said Bjorn Han-

son, an industry consultant. “More and

more consumers are looking for some-

thing that reflects local tastes and cul-

tures.”

All the same, he said, hotel companies

can have only a limited number of a par-

ticular brand in a market. “If there are

20 of a brand in a market, it becomes dif-

ficult to attract developers,” he said.

“The benefit is perceived to be diluted if

the brand expands beyond certain num-

bers.”

Or to put it another way, a hotel man-

agement company with a branded prop-

erty on one street corner would typically

be contractually prohibited from letting

a competitor open another hotel of the

same brand on the opposite corner, said

Michael Terry, associate instructor at

the University of Central Florida’s

Rosen College of Hospitality Manage-

ment. Starting a new brand is a way

around that. “What I can do is put a

brand that’s not the same but similar”

on that corner, he said.

Another factor driving the brand

arms race is the ubiquity of digital book-

ing platforms like Hotels.com and Expe-

dia.com. Hotel companies with more

brands and bigger room portfolios can

negotiate more favorable terms with the

online travel agencies. And by offering

travelers a plethora of options — from

highway budget hotel to luxurious re-

sort — under one umbrella, hotel com-

panies increase the odds that a guest

will book within the hotel’s own booking

ecosystem rather than through a com-

mission-earning third party.

“There’s really not much incentive for

a brand owner to phase out a brand,”

said Chekitan Dev, professor of market-

ing and branding at the School of Hotel

Administration at Cornell University. “It

benefits a brand owner to create addi-

tional brands.”

The numbers tell the story. In Decem-

ber 2007, there were slightly over 140 ho-

tel chains with more than five properties

in the United States, according to the ho-

tel analytics firm STR. In June of this

year, there were about 180.

“It’s kind of a reflection of what’s go-

ing on everywhere else,” said Bobby

Bowers, senior vice president of opera-

tions at STR. “There’s so much to choose

from and so many flavors, you almost

have to launch brands.”

He added: “Companies kind of have

to do it even if they don’t want to. If they

don’t, competitors will eat into their

share.”

Financing for new hotels has also

been readily available, buoyed by low in-

terest rates and record travel numbers.

“Demand and occupancy levels are at

an all-time high,” said Michael Bellis-

ario, a vice president and senior re-

search analyst at Robert W. Baird &

Company. “Development capital is

widely available, so the brands are feed-

ing into that demand.”

Although costs for labor, building ma-

terials and land have all gone up, devel-

opers can “still get loans,” Mr. Bellisario

said. “You’re still seeing financing.

There are a lot of alternative lenders to-

day that didn’t exist last cycle.”

The question now is whether the hotel

companies have been too aggressive in

adding new properties.

Mr. Dev said that in the long term,

“brand survival rate in our business is

close to 50 percent.”

But unlike phasing out an obsolete

cellphone or discontinuing production

of an unpopular sneaker model, killing

off a hotel brand tends to be legally

fraught and logistically messy, Mr. Dev

said. “This has happened the last two

cycles. Lawsuits. Lots of lawsuits be-

tween brands and owners fighting it

out.”

The complex way hotels are built, fi-

nanced and managed means that the

stakes are relatively low for the big man-

agement brand whose name is on the

marquee. The bulk of the risk is shoul-

dered by the property developers and

owners, typically people or entities with

a variety of real estate investments.

In a recession, financially struggling

owners might sue to break their fran-

chise agreement or let the building slide

into disrepair. “Sometimes it’s kind of an

owner inviting the death upon them-

selves,” Mr. Dev said.

If a big hotel company wanted to dis-

continue a brand, it would face legal dis-

putes from property owners who had in-

vested — and probably borrowed — to

build a hotel in accordance with the

brand owner’s required specifications.

Tina Edmundson, Marriott’s global

brand officer, made much the same

point. “We have contracts and we have

owners and we have commitments,” she

said. “It’s not something we can take

lightly at all.”

Hyatt increased its brand total to 17

from 12 last year when it bought a small-

er rival. “We had a real decision to look

at,” said Heather Geisler, vice president

of global brands. “How do we think

about how we position those collection

brands relative to each other?” Ulti-

mately, she said, Hyatt decided to keep

all of its new and existing brands.

A similar dynamic — albeit on a much

greater scale — played out at Marriott,

which wound up with 30 total hotel

brands after acquiring Starwood in

2016, an increase from 19.

“We had brands that, yesterday, they

were competing with each other, and to-

day they’re part of the same family,” Ms.

Edmundson said. Although analysts

had speculated that Marriott might

phase out or combine a few brands ei-

ther as part of the merger process or

more gradually, Ms. Edmundson said

the company was committed to keeping

all of them.

“We were able to push these brands

apart and continue to provide varied ex-

periences,” she said.

Avoiding overlap between brands is a

particular concern for owners, she said.

“We have a lot of governance in place to

make sure that we’re being very fair and

transparent to our owners.”

With brand stacked on brand, hotels look precarious

The view from the San Francisco Marriott Marquis. In 2007, there were about 140 hotel

chains with more than five properties in the United States. Today there are 180.

JIM WILSON/THE NEW YORK TIMES

BY MARTHA C. WHITE

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