Two problems related to transfer case have been reported for the 2008 Cadillac CTS. The most recently reported issues are listed below. Please also check out the statistics and reliability analysis of the 2008 Cadillac CTS based on all problems reported for the 2008 CTS.
I brought my vehicle in for service due to an audible "clunking" coming from the driveline. When the service manager shifted the car into gear in the service bay there was an audible "clunk" to which he stated that it sounded like my driveshaft was "coming off. " I left the car and went to lunch. 30 minutes later I was told that my vehicle needed a new transmission and transfer case because the transmission output shaft was "stripped" and the car would not move on it's own. The service manager told me that they had taken the vehicle out for a test drive and that pulling back into their parking lot there was a bang and then the car would not move anymore and that they had to push the vehicle back into the garage. In researching this issue I found a technical service bulletin put out by general motors for this exact issue in other 2008-2013 Cadillac Cts models equipped with all wheel drive. I also found that the root of the problem is that there is no gasket or barrier between the transmission output shaft and the transfer case input shaft. This allows water and/or moisture to get into these components causing corrosion which leads to the "stripping" of the transmission output shaft. Gm has created revised components to allow for a gasket between these components, but this requires a complete tear-down of the transmission and transfer case. I am now forced to pay for a new transmission and transfer case on the vehicle (because I still have a lien on it) and Cadillac and/or gm are refusing to recognize this problem or help in covering any of the repairs. There are multiple complaints regarding this problem from other Cadillac owners.
On April 8 2016 my wife was on the way to the bank at peach and liberty in erie PA. She was stopped at a red light when the light turn green she had no transmission or brakes. Luckily for her the emergence break worked because she was going backwards. Had it towed to roth Cadillac in erie PA. Was told that the transmission and transfer case broke (there was no warning) and they didn't know why the brakes went out when the transmission went. So again my wife contacted Cadillac headquarters and my wife got an email from Cadillac headquarters saying sorry for your problem but we will give you one hour of diagnostic for free. And from the dealership said this been happening a lot.