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Last Thursday, General Motors announced that it will invest $190 million at its Lansing Grand River assembly plant to retool for the production of an "all-new small luxury car" slated to join the Cadillac lineup in the fall of 2012. This model, known as the ATS, slots in below the Cadillac CTS and is expected to compete with the likes of the Mercedes-Benz C-Class and BMW 3 Series.

The long-rumored smaller Cadillac now looks set to debut in 2010 and may be offered exclusively with four cylinder engines. The new sedan would be slotted under the existing CTS and be built on a new rear drive platform. The last time that Cadillac offered a four cylinder car in the U.S. market was in the early 1980s with the Cavalier based Cimarron. More recently, the Saab 9-3 based BLS has been on sale in Europe. Neither of those cars has been a commercial success, but neither was a particular