It doesn’t seem that long ago that General Motors was pouring billions of dollars into Cadillac in a bid to make it a world-class luxury car brand that might once again deserve to call itself “standard of the world.” Now, with GM on the verge of bankruptcy, all signs point to a full scale retreat. Assuming GM pulls through, I wouldn’t be surprised if GM eventually killed or demoted Buick, then moved Cadillac into Buick’s “near luxury” position much like Ford has been doing with Mercury and Lincoln. Among the many casualties of GM’s meltdown, this one might be the saddest.

Cadillac’s bid met with an early success. The 2003 CTS’ angular styling might have polarized opinions, but it was distinctive and grabbed the market’s attention–in a good way. Reviews of the CTS’ performance suggested that, if GM persisted, it could offer world-class driver’s cars.

Unfortunately, other Cadillacs of this generation failed to do nearly as well. While I was interviewing people inside GM’s Design Center in 1999, designers in the Cadillac studio were trying to decide whether the planned crossover should have proportions more like an SUV–the direction Lexus had gone with the RX–or more like a wagon. They opted for the latter, perhaps thinking that the resulting lower center of gravity would appeal more to enthusiasts. Bad move. Combine these proportions with a BMW-like price, and the 2004 SRX failed to sell.

The 2004 XLR roadster was sharply styled, but under-engineered, insufficiently luxurious, and (like the SRX) over-priced. GM somehow convinced itself that it could price its cars like their leading competitors from the start–a bad move. Both Toyota and Hyundai have recognized that new entries must start low. If they sell, then you can raise the price. There wasn’t much sales potential with this one, regardless.

The biggest failure of all was the 2005 STS. The CTS had carved out a spot vis-a-vis the BMW 3-Series and Mercedes C-Class. Could the STS now do the same against the 5-Series and E-Class? No, no it couldn’t. The car’s styling didn’t work, partly because GM lost its nerve and tried to tone down the original theme (which might have been even less attractive, but outsiders never saw it). The interior also wasn’t nice enough to compete against the German midsizers.

Offering hyper-expensive supercharged STS-V and XLR-V variants was little more than a distraction. If the basic product isn’t a winner, adding power isn’t going to make it a success.

Vice Chairman Bob Lutz’ desire to offer a production version of the super-large, super-powerful, super-space-inefficient, $100,000-plus Sixteen? At the time this seemed like a loss of focus. Now it seems downright ridiculous.

At any rate, Cadillac’s advance stalled, then reversed when the 2005 STS died on the brand’s Cemetary Ridge. In the aftermath, GM couldn’t decide what to do next. Plans to replace both the STS and DTS with a large rear-wheel-drive luxury sedan wavered, then died. The V8 that would have powered this car was also canceled.

Yes, the redesigned 2008 CTS has deservedly been a hit. But you can’t base a luxury brand on one $35,000 car.

The real harbinger of the future: the 2010 SRX. Based on a front-drive platform and loosely related to the new Chevrolet Equinox, this car could have been a Buick. Cadillac’s target has clearly shifted from the Germans to Lexus and Lincoln.

The latest rumor: Cadillac will get a front-drive midsize sedan, to be priced between the Buick LaCrosse and the CTS. This car’s interior should be at least as roomy as that of the CTS, making their relationship unclear. Think Lincoln when the LS and Zephyr were together in the showroom.

I think it’s clear which two models will represent Cadillac’s future, and which one will be a relic of its final bid for glory. Only one question remains: what will replace the current DTS? Another large front-driver most likely–but using what platform?

Odds are that, following Ford’s lead, the Cadillac and Buick channels will be merged, then Buick will be phased out or shifted downmarket to make room for a near-luxury Cadillac range.

Want to remember Cadillac at its final triumph? Buy a 2009 CTS-V.