The Automobile and American Life: The American Automobile at the beginning of the 1970s I : Ford

Saturday, May 18, 2013

The American Automobile at the beginning of the 1970s I : Ford

Hi folks -- I am starting a new study on the late 1960s and early 1970s. This period was pivotal to the future of the American automobile industry. That year I graduated from Davidson College, largely in a mental fog concerning the world around me, obsessed with fears of the draft and oblivious to much of what was really important. Just as 1970 would prove decisive to the future of America, it was also decisive in a negative way in terms of my own life. I have spent much energy since then in dealing with the ramifications of the decisions I made back then, just as the American automobile industry continues to do. Here is how Forbes began 1970 with its analysis of the auto industry:

"Automotive Products," Forbes, January 1, 1970, p.191.

It was supposed to be the year of the intermediates -- the slightly smaller than standard sized Chevrolet Chevelle, Dodge Coronet, and Ford Fairlane, for example.

These models had been selling well for a couple of years, and the marketing experts decided that it was where they should put their styling emphasis and peppiest promotion. The production men geared up for a heavy output of the intermediate models.

So what happened? The public suddenly lost enthusiasm for intermediates and began buying more high-priced and low priced models. As a result the auto companies spent 1969 scrambling to change over production lines to meet demand.

In sales terms, 1969 was a year of sideways motion until the third quarter, when Chrysler sales edged off. That, combined with heavy retooling costs, caused a 48% earnings decline at Chrysler for the first nine months. By the 4th quarter, the entire industry's sales were running about7% below 1968's 8.8 million car volume, year to year. Although market shares held fairly steady for all but American Motors (victim of a five-week strike), profit margins narrowed considerably. By contrast foreign car importers had sales running about 10% ahead of 1968 toward year end.

The problem, of course is that the auto companies deal with a fickle auto-buying public whose frequent shifts in taste are encouraged by annual model changes and ever-widening product lines. Back in the days when fewer models were offered in fewer price ranges, the auto companies had better control of their markets, and forecasting was much easier. But now they are engaged in a billion-dollar game of trying to outguess the public.

The Ford product line reflected the dilemma of markets and complex consumer preferences. The LTD was placed at the top of the Ford line, a long wheelbase (121 inches) vehicle with hidden headlamps and five possible engines, ranging from a 302 cubic inch V-8 to a 460 big block. With hard top sedan, coupe, convertible and station wagon variants, the LTD was just one example of the fruits of flexible mass production, if one sees these large number of consumer choices a direct benefit to the firm. Immediately below the LTD was the Galaxie, also a 121 inch wheelbase car, and also available with numerous options, including a 6 cylinder 240 cubic inch engine. The intermediate model in the Ford line was the Torino, the Motor Trend car of the year for 1970. Influenced by designer Bill Shenk, the Torino had a "Coke bottle" shape with a narrow waist and bulging front and rear fuselages, mimicking a supersonic aircraft of the day. The Torino consisted of 13 models on a 114 inch wheelbase, and engines ranging from a 250 cubic inch 6 to a 429 that was featured in the Cobra Jet model. As Motor Trend commented, the Tornio was "Not really a car line in the old sense, but a system of specialty cars, each for different use…from luxury to performance."