This is the official transcript, edited just a bit to get right to the point. It was May 23, 1968 and Henry Ford II, chairman of the board, was fielding questions from stockholders in Detroit's Ford Auditorium. Up jumped Mrs. Anna Muccioli of Grosse Pointe Farms, Mich., who owned 200 shares.
Anna Muccioli: I have just one complaint. When Thunderbird came out years ago it was a beautiful sports car. And then you blew it up to the point where it lost its identity. And now the same thing is happening with Mustang. They're blowing that one up. Why can't you just leave a sports car small?
Chairman Ford (after noting that he personally agreed): Hopefully we will keep in mind what you say here.
That was five years and several models ago; this week Anna Muccioli and fellow critics will discover that Ford has finally stopped "blowing up" the Mustang. In fact, in a historic turnaround, Mustang has shrunk back into its own identity, something American cars rarely do.
The little 1974 model is sure to attract widespread attention, since nobody knows if a car builder can successfully jump backward and also because the first Mustang stirred such a special response in 1965, selling an industry-record 418,812 in the first year. In those days Mustang was widely regarded—Anna Muccioli's reference is typical—as something of a sports car. Technically, it was nothing of the sort, but among Americans not willing to sacrifice any comforts for performance it was about as close to a sports car as they would get from Detroit. Sporty car was a more accurate label.
But then, as happens in a country with a fixation on things king size, the car grew and grew, ending up in 1973 both middle-aged and lumpy, expensive to run and often indecently overpowered. Meanwhile, smaller cars rolled ahead until finally 40% of all sales went over to the little fellows. "We didn't leave the market," Ford President Lee A. Iacocca noted last week. "The market left us."
Ford secretly ordered the Big Shrink in 1970. The result is a '74 Mustang II that is 19 inches shorter overall with a 13-inch shorter wheelbase than the 1973 model, and also one inch lower and two inches wider than the 1965 original—a snappy little rascal that, while still not a true sports car, is now more sporty than ever before. And with Son of Mustang come key changes. American muscle is out and a European flair is in. The basic new power plant is a 2.3-liter, four-cylinder number—first U.S. engine built to the new metric system and first American-built Ford four since the 1932 Model B.
Lest Mustang fans panic at this projected cut in power, advance road tests show that the 102-hp engine is plenty strong enough to wheel the 2,743-pound car around in lively fashion, particularly when tied to rack-and-pinion steering and a front suspension system borrowed from competition sports cars—an isolated steel bucket miniframe within the frame. With the new size, naturally, comes added mileage. As Iacocca admitted, "Sometimes I think we're luckier than we are smart. Here we come up with a 20-mile-per-gallon car in the middle of a fuel crisis."
Still, while reducing a car is one thing, Ford's biggest gamble is really based on an economic hunch. Since the market is already up to here in small cars of all kinds, Mustang II proposes to be a luxury car as well. Iacocca puts his bet this way: "Among smaller cars the sales of cheapies are falling off, while the same size but more luxurious Datsun 240-Zs and Celicas are selling like mad. That has to be our signal."
Considering its pint size, Mustang II is packed with fancy stuff, practically a Lincoln Continental for little people. Rich carpeting abounds, even into the trunk; dashboards are aglow with velvety simulated woodgrain finishes; bucket seats are the best ever; and the center console is miniaturized elegance. A real, honest-to-goodness tachometer is standard on all models—and a tach has got to be the ultimate pagan luxury when one has an automatic transmission.