by A. J. Baime
Through his office window Henry II could see the stacks of the Rouge car plant billowing on the horizon. The Rouge was his grandfather’s masterpiece, an industrial city that opened in 1920 with ninety-three buildings, 100 miles of internal railroad tracks, and sixteen locomotives. The stacks looked different now than they did in Henry II’s early memories, having bled forty years of smoke into the ether.
Just before 10:30 A.M., Henry II told his secretary to summon an employee named Lee Iacocca. Minutes later, the thirty-six-year-old head of sales and marketing for Ford trucks and cars entered Henry II’s corner office. Iacocca stood lanky at six feet, with olive-toned Italian-American features and a swoop of receding brown hair. His suit was a little flashier than the typical Dearborn getup. Not everyone in the Glass House knew how to pronounce the name Iacocca. He and Henry II had shaken hands but had never shared a conversation. Now here Iacocca was in Mr. Ford’s corner office.
“It was like being summoned to see God,” he later said.
“We like what you are doing, but we have something else for you,” Henry II said that morning. After a pause: “How would you like to be a vice president and general manager of the Ford division?”
Iacocca gritted his teeth and smiled. As head of the Ford division, his job would be to bring out the new Ford cars—cars of the 1960s. The man who would soon be called “one of the greatest marketing geniuses since P. T. Barnum” got his first big break. Henry II followed with a little advice.
“If you want to be in this business and not lose your mind, you’ve got to be a little bold,” he said. “You’re going to make some mistakes, but go ahead.”
When they shook hands, a relationship was born. Neither Henry II nor Iacocca knew at that moment that a revolution was about to grip their industry. A craving for speed was about to spread across the country like a contagion. Within months, it would begin to root itself in the public consciousness. For men who made cars, it would present extreme controversy, and a most magnificent opportunity.
This was Detroit—the Michigan city where the age of coal and steam had ended. It was a place where the grandeur of immeasurable wealth and the grit of an hourly wage communed. Detroit’s car business grew so fast during the twentieth century, locals joked that the rise of the city’s skyline could be measured in miles per hour.
In 1960, the Detroit companies were selling more than six million cars a year. The industry consumed 60 percent of the nation’s synthetic rubber, and 46 percent of the lead. Unlike the men who founded American car companies early in the century—Henry Ford, Ransom Olds, the Dodge brothers—the auto men of the day didn’t have to know how to design an engine. They did have to be good at math. “This is a nickel and dime business all the way through,” Ford vice president Lewis Crusoe said. “A dime on a million units is $100,000. We’d practically cut your throat around here for a quarter.” Companies were no longer run by the men whose names were on the cars. Except for one. In Detroit, Henry Ford II was royalty. “My name is on the building,” he liked to say when his authority was questioned.
Henry II became a Detroit icon the day the nurses first swaddled him in the maternity ward. He was born on September 4, 1917. Any doubt about his destiny was put to rest when he was a toddler. In 1920, cradled in his famous grandfather’s arms, he held a match to the coke and wood in Blast Furnace A at the River Rouge car plant. At three years old, Henry II breathed life into the largest manufacturing plant the world had ever seen while news photographers showered him with camera flashes.
He spent his early years in Grosse Pointe at his family’s sprawling estate on Lake Shore Drive. His wealth isolated him; his childhood was anything but normal. The estate where he was raised had cement walls around it and a full-time security force lived on the property for fear of kidnapping plots. He had a little black button beside his bed that summoned his governess at any time of night, should he be thirsty. At Yale, Henry II couldn’t pass engineering. He left school without a diploma after he was caught cheating on his final exam. When World War II broke out, he joined the military, as was expected of him, and was posted to the Great Lakes Naval Station.
During the years Henry II was away from home, the Ford empire, built up in the early part of the century to amass hundreds of millions of dollars, began to unravel. A cancer plagued the family, both literally and figuratively. The Fords had a dark family secret.
Throughout the 1920s and 1930s, Henry II’s father Edsel had fought to modernize the company. He argued for a new breed of college-educated executive, and new cars that embodied style, personality, modernity. Henry I rebuffed him at every turn. The world was changing, but Henry wouldn’t budge. “The customer can have any color he wants, as long as it’s black,” Henry Ford’s famous saying went. General Motors, headquartered nearby in Flint, pressed hard to make its flagship Chevrolet America’s brand of automobile. The national dailies ran banner headlines: “Ford-Chevrolet War Looms,” “Ford-Chevrolet Battle for Supremacy.”
Ignoring Edsel Ford’s pleadings for a new model, Henry chose to fight it out with his obsolete Model T, lowering the price so much the roadster cost less per pound than a wheelbarrow. In 1924, two out of every three automobiles purchased in America were Model Ts. Two years later, Ford was being outsold two to one.
Edsel Ford’s dream was to beat Chevrolet and make Ford America’s car brand again. But he was powerless. On the eve of World War II, Ford held 22 percent of the market it had all but monopolized fifteen years before. Growing increasingly unstable in his elder years, Henry I installed a handgun-toting ex-convict named Harry Bennett in a top managerial position. Highly empowered, enforcing his will with his fists, Bennett harried and humiliated Edsel Ford while Henry I looked on.
As the company declined, Edsel grew ill and weak. He suffered vomiting episodes. He couldn’t walk away from his job. He had an unerring sense of loyalty and duty and he had to think of his son: He had to protect Henry II’s birthright. Edsel died at forty-nine in 1943 of stomach cancer, but those close to him believed he died of a broken heart, president of a family company in shambles, rejected by his father.
“He was a saint, just a saint,” Henry II said of Edsel Ford on the day of his funeral. “He didn’t have to die. They killed him!”
In September 1945, Henry I summoned his grandson to his estate, Fair Lane. The presidency of the company was open, and there was only one person who could rightfully fill it. Henry I offered Henry II the job, leaving the young man at a crossroads. He could walk away and live a life of leisure forever, wealthy beyond most Americans’ ability to fathom. Or he could take upon himself this family legacy with all its fame and warts. Only recently had he come to understand all Edsel Ford had endured. This thing killed my father, Henry II thought to himself. I’ll be damned if I’m going to let it kill me.
Henry II accepted the position—on one condition. That condition set the tone for the company’s next forty years: “I’ll take it only if I have completely free hand to make any change I want.”
Days later, at age twenty-eight, Henry II moved into his father’s office and placed a photo of Edsel Ford behind him, so his father was looking over his shoulder. A young man with a face full of baby fat, a high-pitched voice, and almost no business experience to speak of took the wheel of a corporation spinning out of control. Ford Motor Company was hemorrhaging millions of dollars every month. It was impossible to give an exact number because there was no accounting system. “Can you believe it?” Henry II later remembered. “In one department they figured their costs by weighing the pile of invoices on a scale.” During World War II, the company had built 86,865 aircraft, another 57,851 aero engines, and 4,291 invasion gliders, and the task of retooling the factories to produce road cars was at hand. There were forty-eight plants in twenty- three countries.
All signs pointed to disaster. One Ford executive referred to Henry II as “the fat young man walking around with a notebook in his hand.” Henry II chose his rallying cry, two words he had
printed on signs and plastered all over the Rouge.
“Beat Chevrolet.”
Henry II’s first task was to bring in the college-educated executives his father had fought for. Soon the “Whiz Kids” were pacing the hallways at headquarters, a brilliant ten-man team plucked directly from the Army Air Force who, during World War II, had been in charge of the statistical and logistical management of the waging of war. Among them was Robert S. McNamara, future Secretary of Defense in the Kennedy and Johnson administrations. Recruiters visited fifty universities aiming to hire the top engineering student at each. One graduate student at Princeton named Lido Anthony Iacocca signed on as a $185-a-month trainee.
“Look, we’re rebuilding an empire here,” the company’s legal chief told a lawyer he was interviewing. “Something like this will never happen again in American business.”
Henry II gambled his family legacy on one car. On June 8, 1948, he beat Chevrolet to produce the first all-new postwar model, and personally unveiled it at New Yorks Waldorf-Astoria Hotel. He spent nearly $100 million on the launch, an unheard of sum at the time. It was a slinky Ford with a snub nose and enough interior room that a man could drive with his hat on. Tens of thousands turned up to see the new car and the new Henry Ford. Henry II strode the carpeted floors and smiled nervously. He did not have the appearance of greatness, not a hint of charisma. Among the mingling crowd was the recently widowed Mrs. Henry Ford senior. She could still recall attending her first automobile unveiling, her late husband’s Model T.
“It was more than 40 years ago,” she told a reporter, “and I thought it was the finest exhibition man could create. Who could have imagined then anything as splendid as what I see here?”
The papers called the new Ford Henry II’s “instrument of conquest.” More than one hundred thousand orders came in the first thirty days.
Chevrolet countered in 1950 with the top-of-the-line Bel Air. Ford answered with the Crestliner. Chevy launched the Corvette at its 1953 Motorama and Ford came back with the Thunderbird for 1955. As the two giants stood toe to toe, more Americans chose sides, shelling out for new vehicles. The 1950s saw a crystallization of the middle class—Detroit’s prime customer. Suburban neighborhoods reachable only by car blossomed over the forty-eight states. All the elements conspired to lead the industry into a Renaissance unlike any in history. American cars with big engines and bright paint were symbols of prosperity and supremacy.
By 1955, Americans were buying up vehicles at a record pace, and Ford and Chevrolet were running neck and neck. Henry II had engineered what many were calling “the greatest corporate comeback in history.” Dearborn was electrified.
On February 21 of that year, President Eisenhower spoke out in favor of the new Federal-Aid Highway Act, which would pump $100 billion into creating a nationwide interstate highway system, the greatest system of government-controlled free highways in the world. That same week, Henry II picked up an issue of Life magazine and saw his face staring back at him. It was the face of a thirty-eight-year-old who had grown accustomed to his position as one of the most influential men in America. His face now radiated power, his eyes communicating a distinct fearlessness. “The fight between Ford and Chevrolet has given the public a spectacle combining some of the best features of the World Series, a heavyweight championship fight, and a national election,” the Life story read. “Ford’s fight to regain the leadership it lost in the 1930s, resulting in the biggest industrial struggle of our times, is an extension of one of the most remarkable human stories of any time.”
The Deuce had arrived.
It was this world of money and cutthroat competition that Lee Iacocca stepped into in the winter of 1960. Iacocca’s promotion to top man at the Ford division occurred the same week that John F. Kennedy was voted into the Oval Office. Inside Iacocca’s nerves slithered, but his outer shell was impenetrable. His colleagues saw a salesman through and through. After listening to Lee talk about a car, one once said, “I didn’t know whether to drive it home or make love to it.” Iacocca lunched with Mr. Ford in the Glass House’s penthouse dining room—hamburgers with ketchup served by waiters in white coats. There were meetings in Henry II’s office, and company parties that went on and on. Henry II could mix scotch, wine, and cigarettes all night and never seemed to have a hangover.
Iacocca embodied the other end of the American dream. He was the son of Ellis Island immigrants. Raised in Allentown, Pennsylvania, he was the first top man at the Ford division who had real dealership experience, selling on the floor, and he hadn’t shed the bootstrap urgency. Business was personal. He had rougher edges than his associates. He could work the phrase “son of a bitch” into every other sentence. He had dreamed of working at Ford since he was in high school. The day a recruiter from Dearborn showed up at Lehigh in a big Lincoln, and Iacocca smelled the leather interior, his resolve had only strengthened.
During his first months on the new job, Iacocca took a hard look at the American car buyer, not just in present day but what that customer was about to become. He had the benefit of a new tool feeding him information. Computers had arrived in offices. They could make sense of market research in a way a person never could. They answered the question: Who bought what? Where? And when? Sitting in Henry II’s office one day, Iacocca began to map out his vision of 1960s America. He clutched his Ignacio Haya cigar like a stage prop, and he armed himself with numbers. He was very good at math.
“Next year there will be a million more 16-year-olds than there are this year,” Iacocca said. “By 1970, there will be over 50 percent more people in the 20 to 28 year old group than there are today.”
The key to the future, Iacocca reasoned, was the youth market. The war-baby generation was coming of age. Soon the kids would be filing into government offices to get their driver’s licenses, and unlike their parents’ generation, a huge portion of them would have the money to buy an automobile. Trends come and go, but one thing never changes: The primary goal of every sixteen-year-old is to own a car. Iacocca called the new generation “the buyingest age group in history.” If Ford could get the kids when they were young, he argued, Ford could get them for life.
One day early that spring, Iacocca sat down to lunch at the Detroit Athletic Club, a well-appointed watering hole where the walls were lined with portraits of Detroit’s pioneers. The auto men who lunched at the club discussed their cars the way others spoke of their children. That afternoon Iacocca was passed a photograph of a new Chevrolet called the Monza, named after Italy’s famed Grand Prix circuit. Chevrolet had taken its staid compact, the Corvair, and added bucket seats, Euro-style trim, a four-speed stick, and enough engine to power the thing up to 125 mph.
The muscles in Iacocca’s jaw tightened. Those sons of bitches at General Motors saw the same vision of 1960s America that he did. The race was on.
Iacocca gathered a team of admen, engineers, and designers and began to outline a new theme for Ford. “What we need is a campaign, a philosophy that is young at heart,” he told them. The team went to work in a large windowless room at the Ford office called “the tomb,” where Iacocca enforced security so rigid the garbage was burned under supervision. Weekly late-night meetings were held at a nearby motel called the Fairlane Inn. Iacocca’s underlings began to understand the depth of his ambition. He was proof that you couldn’t have enough balls in this town.
Iacocca’s vision included a new model, and a marketing theme to sell it, a way to make a statement: Ford cars were about performance, style, adventure. He knew America was ripe for something different. The numbers were there in the market research, and he could feel it in his gut. Together with his chief engineer Donald Frey, he approached the styling department. Within days, a secret prototype was in the works. The original name was Torino, after the Italian city Turin. But it would one day soon become a car called Mustang.
“Put in class for the mass,” Iacocca told his designers. “If we’re right, this will make the Model A look like nothing.”
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On Monday morning, February 27, 1961, automobile executives throughout the Detroit suburbs awoke to the sound of newspapers slapping onto their stoops. The Detroit News was an international paper, but it was also a car business trade journal and gossip sheet. That Monday was a slow news day. “Liz Taylor Ill.” “Venus Probe Monitored by Soviet Mystery Ships.” On the sports page the daily featured in-depth coverage of the Daytona 500. On Sunday, Marvin Panch had cruised to victory in a Pontiac in the fastest 500 in history—an average of 149.6 mph around Florida’s famous 2.5-mile thunderdome. In columnist Doc Greene’s commentary, readers discovered some interesting information:
In European racing, victory can be translated immediately into sales. Buyers over there operate on the rather simple theory that if, for example, in the 24-hours endurance race at Le Mans, five Ferraris finish ahead of the rest of the pack under such grueling circumstances—it’s the best car and you ought to buy it. “It has worked the same way for us,” remarked [Detroit Pontiac dealer Bill Packer, who sponsored the winning car]. “Back in 1957 when Bunkie Knudsen took over the division, a Pontiac was a good car all right but it had a reputation for being an old woman’s auto. Great for grandmas. Then we started dominating stock car racing. We went way up in sales in just a couple of years.
Stock car racing was not supposed to matter in Detroit. There was a ban prohibiting automakers from spending a dollar on racing. In the late 1950s, American carmakers came under pressure for encouraging drivers through advertising to put horsepower to the pavement on public roads. Ford, General Motors, and Chrysler were involved in a “Horsepower War,” each trying to outdo the other with bigger engines in hopes of capturing customers. Stockpiling power in cubic inches—it was Detroit’s answer to the Cold War. The companies marketed their cars by entering them in a series of Sunday skirmishes called National Association for Stock Car Automobile Racing—NASCAR.