The Edsel story is well known in business textbooks and by historians. Its very name is synonymous with failure. It would cost Ford the equivalent of $1.7 billion. So just went wrong?
In the early 50s, Ford realized it had a problem. While Ford was neck and neck with Chevrolet in the low priced field, they were getting crushed in the middle market. GM had 3 brands in that segment: Pontiac, Oldsmobile, and Buick. Ford had just 1: Mercury.
US Automaker Lineups Circa 1956
Price Class |
Gm |
Ford |
Chrysler |
High |
Cadillac |
Continental |
Imperial |
Upper-Mid |
Buick |
Lincoln |
Chrysler |
MId |
Oldsmobile |
Mercury |
Desoto |
Lower-Mid |
Pontiac |
E-Car |
Dodge |
Low |
Chevrolet |
Ford |
Plymouth |
GM’s Sloan Ladder was the envy of the auto business and both Ford and Chrysler wanted to assemble their own. Chrysler had Dodge, Desoto, and Chrysler and in 1955 they made the Imperial nameplate its own separate brand to compete with Cadillac. And Ford moved Lincoln downmarket to be more of a Buick competitor while Continental became the Cadillac fighter. But Ford still needed a fifth brand slotted between Ford and Mercury. In 1955, work started on the “E-car” division, “e” standing for experimental.
The first screw-up came with just deciding on a name. At one point, they even retained the poet Mariane Moore to suggest ideas, which were not officially considered but meant to stir creative thought. The most famous one was “Utopian Turtletop”. They did extensive consumer research, and consistently the most popular names were “Ranger” “Citation” “Corsair” and “Pacer”. They would wind up being the model names for the brand (and each would be reused). “Edsel” had been considered from the beginning. It was the name of Henry Ford’s son who served officially as company president between 1919 and 1943 (with his father being the true man in charge for most of that time). Henry Ford II, president of FoMoCo, did not want his father’s name turning on a bunch of hubcaps. Predictably, they chose the name that everyone hated.
The next screw-up came during the design phase. Designer Roy Brown was inspired by the LaSalles of the 1930s and wanted that deft vertical slit. But engineers, worried about engine cooling problems, widened it. The result was a grille that has been compared to a horsecollar, an Oldsmobile sucking a lemon, a toilet seat, and something not really speakable (“if you put some hair around it, you’d have an Ethel”).
The new division was unveiled to the public on “Edsel day”, September 4, 1957.
The launch was accompanied by the most expensive advertising campaign in history up to that point. They were pretty campy (“It’s Like Falling In Love”), but showed off some nifty features. The Edsel had warning lights on the gauges, it had an automatic transmission with push buttons on the steering wheel instead of a shifter, and the trunk could be opened from the inside. It even offered seat belts and child locks on the rear doors. The Edsel was offered in 7 different models, with the aforementioned Citation, Pacer, Ranger, and Corsair being the sedan, coupe, and convertible variants, and supplemented by 3 different station wagons, Bermuda, Roundup, and Villager. Sales for the first year were 63,000, well below expectations, but it was the 2nd most successful new brand launch at the time, behind only the 1929 unveiling of DeSoto. One problem with Edsel was its confused place in Ford’s lineup. There was substantial overlap with Ford below and Mercury above and buyers didn’t know what to think of it. It was also poorly put together and not nearly as exceptional as the advertising suggested.
The Edsel’s biggest problem, by far, was the economy. Its launch coincided with the nasty Eisenhower recession, the worst economic downturn since the war ended. For many people, it felt like a return to the dark days of the depression. And Edsel was not the only brand afflicted by this. The car industry essentially ground to a halt. Michigan’s unemployment rate hit 11%, compared to a national average of 7.5%. One of the other casualties would be the DeSoto marque, killed off in 1961.
Just months after its launch, the Edsel was turning into a punchline. In May 1958, when Vice President Richard Nixon was touring Peru, riding in an Edsel convertible, angry protestors suddenly started pelting him with eggs. He would later joke that they were throwing the eggs at the car, not him.
Ford resorted to increasingly desperate measures to sell the Edsel. They had dealers offer free pony rides and held contests to give them away. This was not a well thought out idea, the horses left showroom floors covered in poo. The dealers also found they made more money selling the horses than the cars.
For 1959, Ford drastically toned down the Edsel’s styling, at a time when GM was making their designs more insane than ever. The infamous oval became a normal looking grille, it didn’t even have tailfins. The pushbutton transmission disappeared, engines were downsized, and prices were cut. The number of models was cut down to just 3: Ranger, Corsair, and Villager. This didn’t help and only added to the confusion of where Edsel belonged in the marketplace, sales fell to 45,000, despite a recovering economy.
The man most directly responsible for the Edsel’s demise was executive Robert McNamara. He believed Ford should’ve been a single-marque brand. He even tried to kill off Lincoln-Mercury, but had his mind changed after seeing a prototype design for the 1961 Thunderbird and asked it be repurposed as the new Lincoln Continental. In Fall 1959, he convinced Henry Ford II to drop the Edsel brand. Unfortunately, McNamara didn’t make such good decisions regarding Vietnam.
McNamara’s role in the Edsel’s death haunted him for the rest of his life. In 1964, Barry Goldwater claimed McNamara, now Secretary of Defense under LBJ, was responsible for the Edsel’s failure. In response, former Ford Vice President Ernest Breech, a donor to Goldwater’s campaign, wrote a letter to the Senator stating "Mr. McNamara ... had nothing to do with the plans for the Edsel car or any part of the program.". McNamara kept copies of the letter during his time at the World Bank to distribute to those who levied the charge at him.
For the 1960 model year, the oval disappeared altogether and was replaced by something that looked like a Pontiac ripoff. The Corsair model was discontinued. On November 16, 1959, just 2 months after launch, Ford announced the end of the Edsel brand, with production ceasing at the end of November after just 3,000 models had been sold.
The Edsel had been conceived during the sugar-high year of 1955. It would take a decade for car sales to recover to that level. By that point, Ford had the right car at the right time; the vinyl-roofed LTD.
In 1987, Ford tried again to launch a new division. It was meant to sell European Ford in the US. The very name of the brand just showed its stupidity; Merkur, German for “Mercury”. It was, however, a much less costly failure than the Edsel.
History has absolved the superiority of Ford’s business model. The whole “middle market” idea would collapse. Even the 4 lower rungs of GM’s Sloan Ladder began to converge on price. And over at Chrysler, Dodge and Plymouth would wind up overlapping, leading to the latter’s demise. Since 2000, we’ve said goodbye to most of the middle market brands such as Oldsmobile, Pontiac, and Mercury. The only reason GM keeps Buick around is its popularity in China.
But back to the Edsel, its failure is simply a reflection of the fact that the car business is a tough one. Even if it was less ugly, it probably wouldn’t have survived for long. Ford was not good at managing brands, Mercury was a constant victim of badge engineering while GM’s divisions could keep things separate, at least until the 1980s. But that’s just how it goes and the Edsel remains an important case study in business.