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The
Edsel
Brian
Trumbore
President/Editor, StocksandNews.com
This month marks the 50th anniversary
of the Edsel, one of the all-time product busts. What
happened, and why the name?
With
the post-World War II surge in consumerism, by 1950
there were 1 million families in the United States
who could afford two cars. By 1960, this figure was
expected to be 7 million.
General
Motors at this time had emerged as the #1 automaker
and as families outgrew their Chevy, or could afford
a second, high-end vehicle, they moved up to a Pontiac,
Buick, Oldsmobile, or Cadillac. For its part, Ford
could offer its Mercury or Lincoln lines, which were
perceived to be more on the luxury side. So Ford sought
to fill the middle rung.
1955
was Ford's most successful ever thanks to the introduction
of the Thunderbird and Ford decided to set aside $250
million ($2 billion in today's dollars) for what would
become the Edsel and an entirely new division.
While
the designers toyed with their models, the chosen
advertising agency, Foote, Cone and Belding, was sifting
through 18,000 possible names, which it then winnowed
down to 16. Some of these were doozies?like Utopian
Turtletop (selected by a famous American poet of this
era, Marianne Moore) and Elkherd.
More
conventional offerings in the final cut were Phoenix,
Altair, Citation, and Corsair, with the latter two
being the top choices of the creative folks. But management
went in a totally different direction?the new car
would be called the Edsel, after Henry Ford's late
son. Market research showed consumers associating
Edsel with "diesel" and "weasel," but no matter, Edsel
it was.
It's
been said that the original design of the car was
superb, but then Ford's accountants demanded one cost-saving
measure after another and most would agree the finished
product was uuuu-gly.
Some
said the vertical front grilled evoked female genitalia,
though at the time GM was featuring cars with pointy
bumper guards that distinctly resembled bras. Others
said the grille looked like a bird's beak.
Columnist
George Will recently wrote of the Edsel misadventure:
"Remember
the basketball coach who said of his team, 'We're
short but we're slow'? The Edsel was ugly but riddled
with malfunctions. So many malfunctions that some
people suspected sabotage at plants that had previously
assembled Fords and Mercurys. Those two Ford divisions
perhaps hoped the Edsel would bomb."
The
Edsel was formally launched on Sept. 4, 1957, and
in the first weeks and months there were millions
flocking to Ford's showrooms, but few actual buyers.
How few? Try 64,000 cars sold the first year. It didn't
help that the economy was entering a recession, and
that a week before the introduction, the USSR announced
it possessed a missile capable of dropping a bomb
anywhere in the U.S. Then a month after the launch
of the Edsel, the Soviets launched Sputnik, which
shook America up further. Not a great time to be selling
big ticket items, it turned out, especially ugly ones,
and the Edsel went from wundercar to laughingstock.
It lasted all of 26 months.
As
George Will wrote:
"The
short, unhappy life of that automobile is rich in
lessons, and not only for America's beleaguered automobile
industry. The principal lesson is: Most Americans
are not as silly as a few Americans suppose."
But
on a different topic, I was reading a Newsweek piece
on the history of computers, and I see that the name
Altair was an important one back in 1975. The 'Altair
8800' was the first personal computer, costing $495
assembled. 1975 was also the same year Bill Gates
and Paul Allen founded Microsoft.
Sources:
Martin
S. Fridson, "It Was a Very Good Year"
Steven Levy / Newsweek
Rick Newman / U.S. News & World Report
George Will / Washington Post
Wall
Street History returns in two weeks.
Brian
Trumbore
BUYandHOLD
does not recommend any securities. The securities
mentioned above are being used for illustrative purposes
only and should not be regarded as an offer to sell
or as a solicitation of an offer to buy.
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