Mention “Edsel” to anyone over the age of 30, and you will hear pretty much the same response. While the answers may vary somewhat, practically everyone knows it was a car introduced in the 1950s that failed miserably. Many people will add that they think it bombed because of its bizarre front-end styling. But, in fact, the Edsel failed for more fundamental reasons.
The Edsel proved that mere size doesn’t insulate corporate decision-makers from errors in judgment; large automotive corporations are just as capable of making major mistakes in new product planning, production, advertising, and marketing as smaller companies. It is a fascinating story that holds free market implications worth remembering.
The early 1950s were a euphoric period for automakers. In 1955 Americans bought a record 7,169,908 new cars. This auto-buying frenzy was just one aspect of the postwar economy that Vance Packard described in The Status Seekers, published in 1959. In Packard’s view, automobiles evolved from mere transportation vehicles just after World War II to symbols of middle-class affluence in the first half of the 1950s. The V-8 engine reigned supreme and horsepower was the watchword. In this heady market atmosphere, Ford Motor Company conceived a new car that they hoped would help the company surpass General Motors in overall market share… read more >