THE LAUNCH
THE LAUNCH
LEE IACOCCA
The son of Italian immigrants, Lee Iacocca went to work for Ford in 1946, starting with a sales job at a Pennsylvania assembly plant. But he had a much bigger career goal—he planned to reach company vice president by the age of 35.
Iacocca strategically worked his way up the ladder, moving into a sales manager position for the East Coast, then assistant district manager. His clever “$56-a-month for a ’56 Ford” marketing program led to a promotion and relocation to Dearborn to manage Ford’s truck marketing, resulting in record truck sales and yet another promotion into car marketing. In November 1960, Henry Ford II promoted Iacocca to vice president and general manager of Ford Division. Iacocca was 36.
As the top manager of Ford, Iacocca had the horsepower to pursue a hunch, shared by others at Ford, that a new vehicle would appeal to the Baby Boomer generation as they came of age in the mid-1960s. And he knew very well that Chevrolet was selling more of its Corvair, originally an economy car, by offering a sportier Monza model with bucket seats, stick shift, and upgraded interior trim. There was nothing like it in the Ford lineup.
Iacocca realized that economy-based Falcons and boxy Fairlanes weren’t the answer. He predicted that, as Baby Boomers matured and reached driving age during the 1960s, the huge youth market would crave sports-car styling and performance combined with the practicality of four seats and a usable trunk. Selling the concept to company President Henry Ford II, who was still reeling from 1958–60 Edsel failure, would be the challenge.
To convince the man whose name was on the building, Iacocca needed a team to help him gather conclusive data. And they had to do it without anyone finding out.
THE LAUNCH
FAIRLANE COMMITTEE
To convince Henry Ford II that Ford needed a new car for the upcoming Baby Boomer generation, Lee Iacocca pulled together a hand-selected think tank of Ford managers representing engineering, styling, product planning, market research, racing, public relations, and advertising. Iacocca would lead the group, which would initially meet twice a month in an attempt to identify a market that could lead to a concept for a new vehicle. To avoid alerting Henry Ford II, the first meetings were held in a private conference room at the Fairlane Inn, a hotel on Michigan Avenue in Dearborn. The clandestine group became known as the “Fairlane Committee.”
Ford car marketing manager Chase Morsey was assigned to market research. His digging confirmed that the oldest Baby Boomers would reach car-buying age in the mid-1960s, a time when more than half of projected new-car sales would be purchased by buyers between the ages of 18 and 34. Morsey’s surveys also determined that this youthful segment was not intrigued by the traditional styling favored by their parents. They wanted bucket seats, four-on-the-floor shifting, and styling that represented a certain image. Additionally, a booming economy meant that families could add a second car for the wife or teen driver.
Time was of the essence. Noted Iacocca, “We’d hit on such a good thing that we had to get moving before somebody else could come along and beat us to it!”
By late 1961, the Fairlane Committee had determined that there was indeed a market for a new Ford car. They established a list of goals: four-passenger with a sizable trunk, 2,500-pound weight limit, retail price under $2,500, long hood and short rear deck styling, one basic car with many available options, and a target introduction date of April 1964 at the New York World’s Fair.
THE LAUNCH
DESIGN CONTEST
Bolstered by the Fairlane Committee’s findings, Iacocca pushed forward with the idea of a sporty compact. He realized that developing a totally new car was an expensive proposition, at the time costing upwards of $400 million, a scenario that would be surely rejected by Henry Ford II. Special Projects Assistant Hal Sperlich came up with the solution—build the new car on the Falcon’s already existing chassis, drivetrain, and suspension to save both time and money. It was a brilliant no-brainer.
But before Iacocca could approach Henry Ford II with an official proposal, he needed a design, something in clay, to plead his case to make the investment into a new sporty compact. But time was running out. Less than twenty-eight months remained before the target introduction date of April 1964.
During the first half of 1962, Iacocca viewed no less than eighteen clay models. None impressed. So he initiated a design competition between the three Ford Motor Company styling studios—Ford, Lincoln-Mercury, and Advance Projects. On August 16, 1962, Iacocca reviewed six clay models and was immediately drawn to a design from Joe Oros’ Ford Studio that included a Ferrari-like grille opening, tri-lens taillights, and side sculpturing that implied rear brake cooling scoops. “One thing hit me instantly,” Iacocca said later. “Although it was just sitting there, the brown clay model looked like it was moving.”
When Iacocca gambled by inviting Henry Ford II to the styling courtyard for a look, the boss was enthused but not overly excited. “I’ll approve the damn thing,” HFII reportedly said. “ But once I approve it, you’ve got to sell it, and it’s your ass if you don’t!”
Henry Ford II officially approved the project on September 10, 1962. Iacocca had only eighteen months to take his hunch from concept to showroom.
THE LAUNCH
PLANE OR HORSE?
Throughout its development, Ford’s new sporty car was known by several names, including the in-house “T-5” code and the more informal “Special Falcon.” By late 1963, just a few months before introduction, the need for a name became critical as marketing ramped up its efforts toward promotion and advertising.
There were many suggestions. Henry Ford II offered “Thunderbird II,” a designation that was ignored. Dave Ash and Joe Oros pushed for “Cougar,” the name for the Ford Studio’s winning clay design. They even sent Iacocca a die-cast Cougar grille emblem with the note, “Don’t name it anything but Cougar!”
Finally, John Conley from Ford advertising agency J Walter Thompson was dispatched to the Detroit Public Library to compile a list of animal names. From a list that included everything from Aardvark to Zebra, one stood out: Mustang. J Walter Thompson preferred it because it had “the excitement of the wide-open spaces and was American as all hell.”
There was also a connection to a Ford two-seater sports car concept that was making the show-car rounds. It was called Mustang, initially suggested by stylist John Najjar to honor the P-51 Mustang fighter planes from World War II. As Najjar related to historian Bob Fria, “My boss, Bob McGuire, thought it was too ‘airplaney’ and rejected that idea. I again suggested the Mustang name but with a horse association because it sounded more romantic. He agreed and together we selected the name.”
The horse name also provided the imagery for the car’s grille and emblems, a running pony as penned by stylist Phil Clark for the Mustang two-seater concept, which became known as the Mustang I. Clark’s design, which included red, white, and blue bars behind a galloping horse, would be adopted for the new Mustang production car.
THE LAUNCH
MARKETING AND ADVERTISING
With continuing market research indicating that the Fairlane Committee’s hunch about a new sporty car was accurate, Ford ramped up one of the most expensive vehicle launches in American auto history. Approaching the Mustang’s April 17, 1964, on-sale date, Ford invited magazine writers to Dearborn to emphasize the emerging Baby Boomer market and brought in two hundred of the nation’s top radio disc jockeys for a preview drive in the new Mustang. On Thursday night, April 16, Ford bought simultaneous commercial slots for all prime-time TV programming between 9:30 and 10:00 p.m. Plans were also underway for a major press conference at the New York World’s Fair and, the following month, to showcase the Mustang as the pace car for the Indianapolis 500.
On April 17, 2,600 major newspapers carried full-page Mustang advertisements. Twenty-four national magazines hit the newsstands with full-page or double-truck spreads showing what Iacocca called the “Mona Lisa look”—a profile of a white Mustang hardtop with minimal copy, just a simple “The Unexpected.” Small-car owners around the country found Mustang advertising flyers in their mailboxes. Mustangs were also displayed in two hundred Holiday Inn lobbies and at fifteen of the nation’s top airports.
In New York City, Ford went to great heights for a photo opportunity at the top of the Empire State Building. To make it happen, a Mustang convertible was disassembled so the pieces would fit into the elevators, then reassembled on the 102nd floor observation deck.
In a remarkable and unprecedented coup, Ford’s public relations department scored simultaneous covers on Newsweek and Time magazines, both depicting Lee Iacocca with a red Mustang. “I’m convinced that alone led to the sale of an extra hundred thousand cars,” said Iacocca.
THE LAUNCH
WORLD’S FAIR INTRO
Way back in 1961, the Fairlane Committee had targeted the Mustang’s introduction for the opening of the 1964 New York World’s Fair. With the international press gathered in Flushing Meadow, New York, for the fanfare leading up to the Fair’s opening on April 22, Ford scheduled a press conference at the Ford Pavilion to introduce the 1965 Mustang on April 13, four days before the car officially went on sale at Ford dealers. Henry Ford II, Lee Iacocca, Don Frey, and other Ford executives were there to describe the slowly spinning Mustang on the stage.
Cleverly, the spring introduction also positioned the Mustang’s debut away from the other 1965 new-car introductions, which would happen as usual in the fall. In this case, Mustang got all the attention.
One of the New York World’s Fair highlights was the Magic Skyway at the Ford Pavilion. Designed by Disney, the ride transported visitors through a timeline from prehistoric dinosaurs and Stone Age cavemen to life in the future with animated mechanical characters that would become a Disney trademark. The passengers rode in 146 Ford convertibles, including twelve new Mustangs, on a pair of separate moving tracks that ran along glass tunnels around each side of the Pavilion—for maximum visibility to the long lines of fair goers waiting below—before entering the attraction.
When the Mustang assembly line started up on March 9, twelve of the first fourteen completed cars—VINs 100003 to 100014—were convertibles destined for the Magic Skyway. They were delivered to Caron & Company for Skyway preparation, which included the installation of brackets to attach the cars to the tracks, deactivating the brakes and disconnecting the steering linkage, and installing the four-track tape player in the trunk that provided ride narration through the radio speaker
THE LAUNCH
SALES FRENZY
After weeks of hiding new Mustangs in storage buildings and even in salesmen’s home garages, Ford dealers pulled off the wraps on April 17, 1964, to give the public its first up-close look at Ford’s new sporty compact. Thanks to the massive promotion, near-pandemonium broke out, almost like Beatlemania two months earlier. In Chicago, a dealer locked his doors because he feared the mob was endangering both customers and salespeople. In Pittsburgh, a dealer was unable to lower a Mustang from a wash rack because so many people were crowded underneath. In Texas, fifteen buyers got into a bidding war over a dealer’s last available Mustang, then the winning bidder reportedly slept in the car overnight as he waited for his check to clear the bank.
Most dealers sold their allotment of Mustangs that first weekend. In one day, Ford salesmen wrote twenty-two thousand Mustang orders, creating a two-month backlog even though Iacocca had had the forethought to add two more assembly plants—San Jose and New Jersey in addition to Dearborn—in an attempt to keep up with the anticipated demand. By the end of Ford’s 1964 production cycle in mid-August, Mustang sales had reached 121,538. By the end of the extended seventeen-month 1965 model year, Ford had sold 680,989 Mustangs. A few months after the little-changed 1966 Mustangs arrived, sales topped one million, a record accomplishment for a new car.
While advertising promoted the low $2,300 price, that was for a base six-cylinder hardtop with three-speed stick. Many buyers, however, drove away in Mustangs averaging $1,000 more with high-profit options like 289 V-8, automatic, console, power steering and brakes, styled steel wheels, and vinyl top. For the Mustang’s first anniversary, Ford packaged several special or optional components into the GT Equipment and Décor Interior Groups.
Iacocca’s plan had worked to the tune of $1.1 billion in net Mustang profits for Ford.
THE LAUNCH
INDY PACE CAR
With its selection as the pace car for the 1964 Indianapolis 500, the Mustang was front and center for the 48th running of America’s Great Race on May 30, 1964. Three early production Mustang convertibles were shipped to Ford’s NASCAR racing shop Holman-Moody, where the 260 engines were replaced by 289 High Performance versions so the cars could reach the mandated 140 miles-per-hour pace speed. The suspensions were also modified with mismatched shocks for stability in the Indy turns. Reportedly, only two of the cars were completed and delivered to Indy, both Ford Fleet White with Indy Pace Car lettering and blue Rally stripes. VIN 100241 actually paced the race—driven by Henry Ford’s grandson, Benson Ford—where it was seen by an estimated three hundred thousand Indy spectators.
For maximum exposure, another thirty-five convertibles were provided for use as VIP cars and parade-lap duty for the Indy 500 festival queens.
Continuing to take advantage of the Indy 500 publicity, Ford produced 190 Mustang Indy Pace Car replica hardtops for a pair of Checkered Flag and Green Flag dealer sales promotions, with the top five performing dealerships in each sales district receiving a car, each painted in a special code C Pace Car White with white and blue interior, 260 V-8, and automatic transmission. Indy 500 Pace Car decals and over-the-top Rally stripes were also part of the package. Lee Iacocca personally presented the keys to around a hundred dealers during a special Checkered Flag delivery ceremony in Dearborn.
GLOSSARY: THE LAUNCH
Fairlane Committee: The secret group of Ford executives, led by Lee Iacocca, that met at Dearborn’s Fairlane Hotel to discuss their ideas for the car that became the Mustang.
Falcon: A Ford economy compact introduced in 1960. The Falcon chassis and engines would be used for the 1965 Mustang.
Magic Skyway: An attraction sponsored by Ford and designed by Disney for the Ford Pavilion at the 1964–65 New York World’s Fair. Guests rode in Ford convertibles, including new Mustangs, to travel through time, from the ancient past and into the future.
Monza: A sportier Corvair model introduced in 1961 that caught the attention of the youth market. Named after the Italian race track, the Monza sold well and influenced Ford’s decision to create a sportier compact car.
P-51: A single-seat fighter plane used during World War II and also known as the “Mustang.” Several versions were built, including the P-51D with supercharged Packard engine for a top speed of 425 miles per hour.
Pace car: Also known as the safety car, the pace car maintained a safe speed while leading—or pacing—the race cars at the start of a race or during caution periods. The Indianapolis 500 pace cars were typically supplied by manufacturers for marketing visibility.
Sports car: When coined in 1919, sports car described a small, two-seater vehicle with good handling. With its sporty looks, the four-place Mustang didn’t really fit the definition but nonetheless was often described as a “practical sports car.”
World’s Fair: A universal exposition, held every several years in different parts of the world, to showcase the accomplishments of nations. The first one was held in 1851 in London. In 1964, the New York World’s Fair served as the marketing launch for the 1965 Mustang.