The original Ford Fiesta, introduced in 1976, was the Ford Motor Company’s most important new car of the seventies. It was a staggeringly expensive project that began Ford’s conversion to front-wheel drive and took the company into the modern B-segment for the first time. However, the Fiesta also provoked great internal controversy and emerged only after a protracted and contentious development period. In this installment of Ate Up With Motor, we look at the origins and history of the 1976–1983 Mk1 Fiesta, the Fiesta XR2 hot hatch, and the 1984–1989 Mk2 Fiesta.
FORD THINKS SMALLER
Perhaps the most remarkable and ironic thing about the original Fiesta is that while it was an extremely important car for Ford, the company was originally very reluctant to build it at all. In size, technology, and market, the Fiesta took Ford into new territory into which many senior officials weren’t convinced the company even needed to venture.
In the late sixties, Ford’s European operations were generally doing well. Most models were either new or about to be refreshed and the much-publicized racing program had boosted Ford’s image. The corporation’s previously separate and competitive British and German subsidiaries were being integrated, which would shortly result in a unified model line-up, and Ford was preparing to launch the new Capri, a European answer to popular American pony cars like the Mustang.
Despite that success, by 1969 a few voices within the company were cautiously suggesting that Ford needed something more: a smaller subcompact car for the burgeoning B-segment. While Ford was selling well in Great Britain and industrialized, relatively affluent countries like West Germany and Belgium, central and southern Europe were another matter. For many Italians, for example, modest wages, high fuel prices, and restrictive vehicle taxes made even C-segment cars like Ford’s new Escort an expensive proposition. All Ford could offer such buyers was a slightly cheaper Escort with an underpowered 944 cc (58 cu. in.) version of the familiar four-cylinder Kent engine. As a result, Ford’s market penetration in those regions was limited and sales of rivals’ smaller B-segment models were growing.
Surprisingly, Ford management didn’t initially consider that a serious problem. Ford’s Marketing staff insisted that the B-segment was a transitory phenomenon. Their projections, which in retrospect sound almost ludicrously optimistic, suggested that Europe’s economic growth over the previous 15 years would continue apace. Marketing conceded that buyers in some markets could not yet afford cars like the Escort or the larger, D-segment Cortina, but maintained that as those markets’ economies grew, the B-segment would gradually shrink and all but vanish within a decade or so. For Ford to enter that market, then, would be a needless waste of resources. (Throughout the seventies, there was on-again, off-again talk of Ford developing a cheap microcar for emerging markets, but such a car probably wouldn’t have been offered in Europe or North America.)
Predictably, Finance was even more opposed to the idea of Ford developing a B-segment car. Finance’s objections echoed those that been levied against virtually every small car any U.S-based automaker had ever contemplated: that a smaller car would not be much cheaper to design or manufacture than the Escort (which had already been cost-engineered to within an inch of its life), would have to be priced lower (cutting into profit margins), and, if sold in meaningful numbers, would cannibalize sales of the company’s bigger, more profitable cars.
After considerable argument, Ford of Britain’s vice president of product planning, Ralph Peters, received authorization for a small task force to study the issue and create a proposal. A year later, the team presented their findings and a fiberglass mockup to the corporate Product Committee. The team’s conclusion was that Ford could sell 300,000 B-segment cars a year, most of them to customers who had never previously bought a Ford — or perhaps any new car — before.
That projection didn’t silence the dissenters, but it lent the B-car idea a new credibility. Even the most reactionary or penurious executive can hardly ignore potential business of that scale, especially if it offers the possibility of significantly increasing market penetration. The latter had been a particular sticking point for Ford in the U.S.; for all the company’s success in product development, Ford’s domestic market share had remained frustratingly static.
While adding an extra quarter million or more sales a year sounded good, that figure didn’t erase Finance’s fundamental objections. Furthermore, building so many additional cars would entail a major expansion of Ford’s European production capacity. Therefore, if the product bombed or if Marketing’s predictions about the half-life of the B-segment turned out to be correct, the whole exercise would cost Ford dearly: at least $700 million.
THE FRONT-WHEEL-DRIVE CONTROVERSY
Other European automakers, particularly in France and Italy, had fewer qualms, and the late sixties and early seventies saw an explosion of new small cars. Early salvos included the Simca 1204 and Autobianchi A112, followed in the spring of 1971 by the A112’s cousin, the Fiat 127. By the end of 1972, these were joined by the Renault 5, Peugeot 104, and Honda Civic.
By the time the Civic bowed, Henry Ford II had reluctantly conceded that Ford needed a B-segment car for the European market. The abundance of new entries in that segment meant that Ford had a simple choice: They could join the party and grow or sit back and lose market share.
Nonetheless, there was still considerable disagreement about what format a smaller Ford should have. Previously, small cars had used a variety of mechanical layouts, but by 1972, a new orthodoxy was emerging: transverse front engine, front-wheel drive, space-efficient suspension, and a two-box shape, eventually including a rear hatchback for greater load-carrying versatility. All but the last had been seen more than a decade earlier on the BMC Mini, but it was not until the seventies that the front-engine/front-drive (FF) hatchback became the norm in this class. (Some competitors, including Fiat and Peugeot, initially did without the rear hatch, but the market quickly demonstrated a strong preference for the three- or five-door layout.)
Today, the choice seems obvious; the packaging advantages of the FF layout are hard to ignore even for larger C-segment cars, much less smaller ones. However, in the early seventies, Ford’s Finance staff vigorously opposed any talk of front-wheel drive. They hadn’t forgotten Ford’s analysis of the early Mini, which concluded that BMC was selling each car at a loss of more than $80.
Ford’s own experience with front-wheel drive had been less than reassuring. Discounting an abortive early-sixties program to develop a front-wheel-drive Thunderbird, Ford’s only FWD models to date had been the German Taunus P4 and P6 (sold as the Taunus 12M and 15M). Developed in Dearborn as the Cardinal, the P4 was originally intended for both the U.S. and Ford’s German subsidiary, but Lee Iacocca, then Ford Division general manager, had persuaded Henry Ford II to cancel the U.S. car at the last minute, leaving only the German version. The Taunus P4 and subsequent P6 weren’t a complete sales disaster, selling some 1.3 million units between 1962 and 1970, but they were expensive to build, cost more than most direct rivals, and were generally disappointing in both performance and market penetration. Few in Dearborn were eager to go down that road again, which is why the P6’s replacement, the Taunus TC, had reverted to rear-wheel drive. A few German engineers were disappointed, but Ford’s accountants breathed a sigh of relief.
Ford’s thinking on small cars in this era was exemplified by the Escort, introduced in 1968 as Ford’s first Anglo-German passenger car. Developed to replace the British Anglia 105E, the Mk1 Escort was at the smaller end of the C-segment, being considerably bigger than a Mini or a Fiat 600, but some 5 inches (127 mm) shorter than an Opel Kadett. Other than its size, the Escort was a thoroughly conservative design, with MacPherson strut front suspension, rear-wheel drive, a live axle on semi-elliptical leaf springs, and several variations of Ford of Britain’s trusty OHV “Kent” four, usually linked to a four-speed gearbox.
To keep production costs and starting prices to a minimum, the Escort’s basic specification was basic indeed; standard were 12-inch wheels, drum brakes, and interior furnishings that only a determined skinflint or tightfisted fleet manager could love. Buyers could upgrade both the ambiance and the performance by choosing from a multitude of trim levels and option packs, while enthusiasts and automotive journalists were appeased with a selection of limited-production Twin Cam and RS models. The latter offerings in turn served to homologate those cars for rally competition, in which the Escort proved extremely successful.
It would be easy to scoff at this merchandizing strategy, which Ford employed to varying degrees on most of its European offerings of the period, but it was an effective one (Ford sold more than 1.9 million Mk1 Escorts through 1974) and likely very profitable, which left Ford understandably reluctant to step away from it. While some senior executives recognized the need for FWD — including Hal Sperlich, whom Lee Iacocca (now Ford president) had appointed to oversee the project as Iacocca’s special assistant — others still needed to be convinced.