The largest product failure of all time is considered to be that of the Edsel Division of the Ford Motor Company back in the late 1950s. It was a secret car developed under the code name “E” which stood for experimental. Edsel was a separate division from Ford and Lincoln-Mercury, and it had four models at launch. The cars would offer many innovative features such as warning lights for low oil, engaged parking brake, and engine overheating. In addition, the cars had advanced safety features like self-adjusting brakes, seat belts, and childproof door locks. Edsel was to be the “perfect” car.

ACT-OF-KINDNESS

 

But the competition in the marketplace from established brands like Oldsmobile, Buick, Pontiac, Dodge, and DeSoto was intense. The styling of the car with its “horse collar” or “toilet seat” grille was controversial, and its advertising confused consumers. Marketing experts today hold up Edsel as the supreme example of corporate culture’s failure to understand the consumer. The Edsel Division sold 116,000 cars before shutting down production in 1960. In today’s dollars, it is estimated Ford lost over $4 billion on Edsel.

 

It was sobering to compare the challenges that Edsel faced in the 1950s with the   challenges that Lexus faced in the 1980s.

 

In the late 1980s, the size of the luxury market in the U.S. was about one million sales a year with 600,000 of those being Cadillac and Lincolns selling at a price point less than $30,000. Mercedes-Benz and BMW accounted for 100,000 of the four-door sedans being sold in the luxury market costing over $30,000 dollars. The remaining cars selling for over $30,000 were niche vehicles with smaller sales numbers. The most expensive car Toyota sold at the time was the Cressida, selling for $18,000.  Toyota sold about 20,000 Cressidas a year.

 

The Lexus would be a Japanese four-door sedan selling for over $35,000 competing against the established European luxury brands. We did not know what the final design would be, but we knew we needed to sell 40,000 cars in the first year of business to be successful with only one model.

 

There was stress.

 

“…trusting in me you will be unshakable and assured, deeply at peace. In this godless world you will experience many trials and sorrows.” John 16:33 (NLT, MSG)

 

The stress at work was added to by the stress of driving to and from work on the LA freeways. From January 1980 through December of 2009, excluding the three years in Cincinnati, I would drive 37.8 miles each way from Irvine to Torrance on the 405 San Diego freeway. From 1980 to 1984 (when we moved to Cincinnati) I fought the commute. When we moved back a second time it meant I would be commuting on the 405 for the next 24 years. That’s when I learned how to survive the 405.

 

(To be continued in “How to Survive the 405”)