In 1956, Ford Motor Company went public and Iacocca wanted to compete directly with GM’s Cadillac. So, the Ford Edsel (named after Henry Ford’s son) was released with much fanfare. But it was remarkably unsuccessful. The production costs were set in motion long in advance and the car was released on schedule. Unfortunately, sales for the Edsel were dismal at a price tag of $3,500 – $3,766. It was an ugly car that had a strange looking front. Ford lost $350 million on the production while only 119,287 Edsel’s were actually built. An additional problem was that the Edsel competed on price against its own sister divisions within Ford. The Edsel had been priced as high as a Mercury $4,280 – $4,405. Also, there was a recession in 1957. McNamara pushed for the closure of production for the Edsel in light of these facts…
Iacocca learnt from the Edsel errors. The 1960s represented youth with Kennedy in the White House. As the head of the Ford division, Lee shut down the Cardinal project, which was McNamara’s brainchild after Falcon. Again this car was utilitarian, cheap, fuel efficient and well built. It was also boring and built, designed and tested in Germany. Ford projected 300,000 units for the Cardinal but in the US market it was hard to imagine that it would work. The car was too ahead of its time so Iacocca advocated scrapping the Cardinal even though it cost $35 million to produce at the stage Iacocca had it shutdown. This was after McNamara had left to be Secretary of Defense under the Kennedy administration.
