Sales Ad Saturday- Lee Iacocca and the Mustang
What else can we talk about for this week's 'Sales Ad Saturday’? April 17th, 1964 was a big day for Lee Iacocca. Fifty-seven years ago today the work of Lee and his “Fairlane Committee” was finally on display for the world to see. The Ford Mustang was released to the public in a media blitz that coincided with the car’s first public showing at The World’s Fair in New York. Volumes have been written about the national response in the days after the release of the Mustang, but the historical events which eventually led to Iacocca’s involvement with the Mustang began some eight years earlier.
In 1956, Lee Iacocca was working as the Philadelphia district sales manager for Ford. ’56 was not a great year for the automaker. Chevrolet had knocked Ford out of the top sales spot in 1955 and they were on track to easily repeat this in ’56. Robert McNamara had made the marketing theme for ’56 “Safety”, and his marketing plan was a loser. Sales were down for Ford across the US- except in Lee’s district- where the young sales manager had created a highly successful “56 for ’56” ad campaign; a three-year, $56 a month payment plan that was helping sell cars in his district in a big way. Ford Motor took his campaign national, and it added about 75,000 cars to the 1956 tally that they believed they wouldn’t have otherwise sold. Iacocca had Dearborn’s attention.
Iacocca was soon moved to Detroit, where he oversaw Ford’s truck division. After Kennedy’s election, McNamara, who had been named President of Ford Motor Company just a month earlier, was brought on to be Secretary of Defense. One of McNamara’s first moves as Ford’s new President was to recommend the ambitious salesman Iacocca as Vice President of the Ford Division. Henry Ford II, who had previously only met Lee in passing, personally offered him the job on November 10th, 1960.
Iacocca had immediate problems to solve. In February of 1960, Chevrolet had introduced the Corvair Monza, and it was selling well, breathing needed life into the Corvair line. Suddenly the Corvair wasn’t just an economy car, it could be outfitted as a fun, stylish sporty car. The closest car Ford had to compete with it was the plain and unassuming Falcon, and Lee had doubts that dressing up the Falcon in response to the Monza was the long-term answer Ford needed. In 1961, the Fairlane Committee, led by Lee and five of his closest allies at Ford began meeting in secret each week at the Fairlane Inn. In time, their objectives for producing a Corvair competitor became clear: a small sporty car with seating for four passengers, a weight limit of 2,500 pounds, and a target price of $2,500. By late 1961, the goal of introducing it at the ’64 World’s Fair was established. By September of 1962, the team had a design, famously penned by Gale Halderman, that they knew was a winner.
Imagining the car on paper at a hotel in Dearborn was easier than finding the money to develop it. After the humiliating loss of $250 million with the Edsel program, HF2 and his senior executives were cool on the idea of spending the hundreds of millions of dollars it typically took to develop an entirely new car again. The potential market Iacocca believed existed was only proven on paper. Further complicating matters was the fact that Ford had already committed to spending millions to update their existing 1965 line. Despite this, Lee fought hard to sell the Mustang to HF2 and his persuasion eventually worked, but it was a big personal risk for Iacocca. The key to getting approval was to keep development costs down. By building upon the proven Falcon platform and drivetrain components, Ford was able to save millions, developing the Mustang for only $45 million.
Selecting a name for the new car was somewhat challenging. Several potential names had been under consideration, including Cougar, Monaco, Monte Carlo, and T-Bird II. By the summer of 1963, the team settled on the name- Torino. It was an Italian-sounding name that the team felt evoked the European connotations that were a part of the vehicle’s styling. As the Torino ad campaign was being developed, Ford’s in-house PR department stepped in and forced a name change- Torino was out. At the time, HF2 was in the middle of a high-profile divorce from his first wife and had been seeing an Italian socialite whom he later married. The company was concerned about the timing and optics of it all. Another pool of potential names was vetted, and the team settled on Mustang. Originally conceived by designer Phil Clark, it was a fitting continuation of the equestrian logo and name used for the Mustang I and Mustang II concept cars that had been shown to gauge public interest in the new car.
The rest is history. When it was released, the Mustang was an unequivocal success, earning Ford Motor Company a reported $1.1 billion in profits in the first two years alone, and solidifying Lee Iacocca as one of the top automotive executives of his time.