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Iacocca quickly saw that, at 36, he would have to expect some resentment from older men who had been bypassed, and he reacted typically. Says he: "I told a few people, 'Get with it, you're being observed. Guys who don't get with it don't play on the club after a while.' It worked, because all of a sudden a guy is face to face with the reality of his mortgage payments." He quickly brought the sprawling division under his fingertip control by setting up a "black notebook" system in which he had each department head list his objectives for the next quarter, then graded each man on his performance. Says one associate: "He really knows how to whipsaw his men with that notebook."
Off to the Races. It did not take long for Iacocca and the bright young men he gathered about him to realize that their company had some troubles. Right up until the Mustang, Iacocca and his crew had to work basically with models originally laid out under Robert McNamara, who stayed only five weeks after being promoted to the presidency before moving on to the Pentagon. A financial genius, McNamara left Ford a strong company, with the kind of financial controls and organization that it so badly needed. He also was responsible for the highly successful four-passenger Thunderbird and the Falcon.
What McNamara failed to realize was that the consumer is an emotional being who buys his car more for its vague appeal than for any logical reason. In the late '50s the U.S. underwent a strong reaction to the bulges, fins and chrome of most postwar cars, turned instead to a cleaner, simpler and less flamboyant approach to styling. This trend gave birth to the unadorned compact or economy car—low-cost transportation in a plain wrapper. McNamara saw this, and ordered up cars that were neat, in good taste and somehow seemed, like McNamara himself, to have rimless glasses and hair parted in the middle. But the trend to plainness did not last long, and people soon began moving into bigger, more luxurious cars with more power and more decoration.
Ford kept on making its Plain Macs long after the public tired of them—and soon began to pay dearly. With the introduction of the 1962 models, just about at the time that the current auto boom was beginning, Ford began to lose ground steadily in the marketplace. General Motors, which early saw the way the trend was going, had no trouble biting huge chunks out of Ford's sales with its flashy Corvair Monza, its sleek, fast Pontiacs and its wide choice of convertibles and hardtops.
Iacocca realized that he could do little to change the 1962 models, but he got to work on other matters. He got a restyled roof line put on the standard Fords and Falcons by mid-1963. At the same time he installed V-8 engines in the Falcon to meet the growing demand for better performance in the so-called "economy class" car. The moves were credited with being a major factor in reversing Ford's sales drop.