Tag Archives: marketing

This month in Ford’s history: its greatest market failure

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From Benzinga:

This Day In Market History: The Debut Of The Edsel, Ford’s Biggest Flop…in 1957, Ford Motor Company unveiled the Edsel.

The Edsel is infamous as Ford’s costliest mistake in history. Experts estimate the Edsel cost Ford roughly $350 million ($2.3 billion in 2016 dollars) in losses, or roughly $3,200 per vehicle sold.

The Edsel had such a negative impact on Ford’s finances that the company’s net income per share dropped from $5.40 in 1957 to just $2.12 in 1958. Ford also cut its dividend from $2.40 to $2.00 to mitigate the Edsel’s impact on its balance sheet. Ford’s share price itself dropped from above $60 to below $40.

Experts cite a U.S. economic recession, the Edsel’s unappealing name, poor marketing, unreliability, unappealing design and other of potential explanations for the car’s poor performance in the market. Whatever the reason, Ford discontinued the Edsel in 1959, just two years after its launch.

Source: The Henry Ford

It is difficult to imagine this kind of event in the age of NFTs and red hot IPOs (that in some cases we may not be entirely sure what it is the company will produce, if anything). a Washington Post article concluded, “the idea for the Edsel came from Ford executives who were thinking about market niches when they should have been thinking about cars.” But the story is still cautionary from the standpoint of hype, and consumer sociology as the Edsel ultimately failed:

because consumers did not buy it…in reality, however, Ford terminated the Edsel largely because shortly before Ford introduced the car a change in leadership brought a change in corporate strategy that made the Edsel irrelevant to Ford Motor Company’s (FMCs) long-range plans (Dicke, 2010).

The same author in an interesting assessment of what went wrong strategically concludes:

The Edsel was also a reassuring failure in the sense that it in no way challenged the basic soundness of the American economy. As the Wall Street Journal pointed out in its editorial/obituary, consumers could reject any product for any reason or for no reason. After the 1958 model year people rejected the Edsel because they did not like the brand not because it had any serious mechanical deficiencies. Consumers could afford to reject a US$ 250 million investment by an automaker for trivial reasons because they had faith that the auto industry could absorb the loss and come up with something more in tune with their tastes (Dicke, 2010).

See the full paper on Wiley here. 

Vintage Edsel Car – Library of Congress


The Myth and Romance of Los Angeles – Available at Last

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What is ostensibly the best documentary on the City of Los Angeles (and a 95/90 Tomatometer) has at long last, been scheduled to be released on DVD. If you had not heard of the film, there is this, and little else according to IMDB,

In this documentary, Thom Andersen examines in detail the ways the city has been depicted, both when it is meant to be anonymous and when itself is the focus. Along the way, he illustrates his concerns of how the real city and its people are misrepresented and distorted through the prism of popular film culture. Furthermore, he also chronicles the real stories of the city’s modern history behind the notorious accounts of the great conspiracies that ravaged his city that reveal a more open and yet darker past than the casual viewer would suspect.

In addition to being an excellent descriptive paragraph, that’s the kind of stuff myth is made of.

But what is really driving the cult status is the film’s elusive nature as noted in a post today:

Los Angeles Plays Itself is a story of how L.A. has been portrayed on screen, its thesis unfolding through hundreds of iconic film clips. But the biggest reason that Thom Andersen’s legendary documentary has reached a near-cult status is that, due to copyright issues, the film has never been properly released in theaters or on DVD. Until now.

In a remarkable statement, the post goes on to punctuate just how interesting this film is, “it’s probably the most important media study ever conducted on the city—maybe any city!—and no one has been able to see it.” It’s remarkable that business and legal wranglings could eclipse something like this, for a decade.