Yeah, the ATS has been in development for a while.
Cadillac has never had an answer for the 3 series, they plan on changing that.
The turbocharged 6 makes sense for the ATS-V, as the new M3 is rumored to have a turbo 6 as well.
I haven't read anything about the CTS getting larger to compete with the 5 series and don't believe it is necessary.
It is already almost the same size as the 5 (it's one inch shorter, half an inch taller, and half an inch thinner than the 5 series).
It's interesting you would post this today because it has been confirmed by GM that the ATS and XTS will be coming out next year as 2013's. http://www.autoblog.com/2011/08/04/c...ing-next-year/
The bottom is GM's released sketch. The top is a rendering based on the sketch I believe.
The side shot is sporty and distinct from the CTS. Here's a CTS shot for comparison.