Kar-Kraft: Race Cars, Prototypes and Muscle Cars of Ford's Special Vehicle Activity Program

PRELUDE TO KAR-KRAFT: A LITTLE CONCEPT CAR

Lee Iacocca had been looking for a label that would add some class to his Ford product lines. At one time, he considered purchasing Rolls-Royce but ended up looking at Ferrari. Body by Ferrari seemed more exciting and much more prestigious than General Motors’ Body by Fisher. Somehow, he managed to miss or ignore the fact that Rolls and Ferrari did not have their own in-house styling studios or body shops. However, he recognized that Rolls-Royce did not have the excitement status of Ferrari. The growing youth market wanted excitement, and Iacocca wanted the youth market. He strongly believed that Ford’s upcoming basic-transportation Cardinal would offer little excitement to the overall market. He was convinced that a performance-oriented sports car–type product would be an exciting lure for the youth market and would capture a worthwhile portion of the remaining market.

Lee Iacocca’s vision of something for the kids started with this. The little T-5 concept car, which became the Mustang I, was a marvel of styling, engineering, and fabrication cooperation. When its final version hit the market, the Mustang became a marvel of record sales. (Photo Courtesy Ford Images)

The Concept

In 1961, Iacocca began discussing what eventually became the Mustang. He and a small group of his top managers gathered weekly for dinner and a sports car think-tank session. They called themselves The Fairlane Committee, after the restaurant in which they met. The code name T-5 provided cover for their collaborative ideas on Iacocca’s sports car vision. The Mustang moniker came later. Iacocca described the T-5 project as the first of the long-term plans to put something together for the kids.

When the committee’s vision gelled sufficiently, Gene Bordinat, Ford’s styling chief, set his studio to work on the T-5’s prototype body design. The studio had a clay model ready just 21 days after the drawings were completed.

Bordinat’s two collaborators on the project, Herb Misch and Roy Lunn, handled the mechanical engineering aspect, with help from Bob Negstad. Misch was the vice president of engineering and had led the development of the aluminum Indianapolis engine. Lunn was the Advanced Concepts manager. Negstad was one of the top suspension engineers at Ford. They sifted through the parts bins of Ford’s English and German branches. A Taunus engine here, a Cardinal transaxle there, Consul disc brakes and clutch, and a mixture of components from all around contributed to the design. Surprisingly, even given the talents of Misch and Lunn, the results were on a par with, if not ahead of, the best European technology.

The trio referred to the car as the Mustang, even though the official name was still T-5. The Mustang designation appeared on the car at its first public outing. When the second Mustang prototype came along, derived from the first one, Ford needed two names. Thus, Mustang I and Mustang II.

Part of the Mustang I engineering team. This posed picture illustrates a brainstorming session. The styling model, drawing, and blueprints were actual pieces of the engineering puzzle. Left to right are Chuck Mountain, Roy Lunn, Ed Hull, and Jim Mason. (Photo Courtesy Ford Images)

The little Mustang on Ford’s Dearborn Proving Ground banking. The fact that it was fully capable of being driven made it popular with the media and public. It hit a nerve with its unique styling, size, and perceived potential availability. When the production Mustang landed in dealerships, it differed in appearance, but it appealed to a much larger market. (Photo Courtesy Ford Images)

Bordinat and Misch with both T-5 prototypes. One was the fully operational version that debuted at Watkins Glen and toured the car show and media circuits. The other was a non-operational empty shell on wheels. It served as a static display and for photo sessions. Misch is in the car while Bordinat looks on. (Photo Courtesy Ford Images)

The Mustang was a step out of the ordinary for Ford. Ford, like other manufacturers, built show cars called dream or concept cars to gauge consumer reaction to new ideas and styling. Quite often, they had complete engines and drivelines and were drivable. However, they were fragile and companies restricted the media to supervised, low-speed, delicate driving. Ford did not adhere to those restrictions with the Mustang.

Mustang Takes a Bow

The target reveal date was October 7, 1962, at the Watkins Glen United States Grand Prix. To meet the deadline, Lunn went to Troutman & Barnes, a California-based fabrication outfit with impressive credits. They turned the project around and got the car to its debut on time. Lunn suspected that going around Ford’s labyrinthine internal procedures and union restrictions in this manner would drastically reduce the build time. Whether or not he knew how effective the tactic would be is speculative. Regardless, it was a lesson well taught, and the student learned well. Roy Lunn used the lesson to great effect in his next assignment, the Ford GT (which became the GT 40).

The media and spectators at the grand prix welcomed the little concept car, now officially titled Mustang, with great enthusiasm. The media had their first drive at Watkins Glen. Sterling Moss, Dan Gurney, Car & Driver, and Autocar were just a few of the entities that road tested the car. Unlike most coddled concept and prototype cars, select media reporters drove the Mustang hard.

Ford played up the T-5’s drivability in press releases and stock photographs. This photo exhibits several attributes intended to inspire racing enthusiasts. The helmeted driver has a firm grip on the steering wheel, he appears to be wearing a driving suit, and he is leaning into the turn. The positioning of the car exudes speed on the track, even though the car is probably stationary. (Photo Courtesy Ford Images)

The two Mustang concept cars as they look today. The similarities to their separate offspring are apparent. It is obvious that the Mustang I bestowed its basic styling and mechanical components on the Ford GT. Its styling cues are subtle to the point of nonexistent on the Mustang II. However, the styling cues of the Mustang II are very obvious on the final production Mustang. (Billy Jay Espich Photo)

Ford repeated the successful Watkins Glen debut at the October 20 Laguna Seca Pacific Grand Prix. Gurney again demonstrated the Mustang on the track. The results were the same as those at Watkins Glen. Whether media members rode in or drove the car, they loved it and bubbled over the car’s virtues. The performance of the diminutive car and the crowd reaction matched the positive experience at Watkins Glen. These results and some subtle hints threw gasoline on the smoldering rumors of possible production.

Regardless of the Mustang’s reception, the two events confirmed Iacocca’s personal analysis of the market. It hit only a small portion of the market Iacocca wanted to capture. His first child was not appropriate for the overall market.

Perhaps the biggest drawback to the Mustang was the lack of storage space. The midship engine, transaxle, suspension, cooling, and exhaust systems filled the back end. The front end was full of spare tire, suspension, brake, steering and other components. The engineers said storage, low-windshield, and no-top issues could be resolved when, or if, the car went into production. The short body length and wheelbase left little room at either end for a bag of groceries.

Proving the Mustang’s Market

The T-5 Mustang acted as a proof of concept vehicle to qualify the potential market. Feedback from the motorsports crowd, surveys, and media confirmed what Iacocca had begun to suspect. The Mustang appealed mainly to the very narrow sporty car market. It competed for sales with MG, Triumph, Sprite, Fiat, Alfa, and other small cars running in the production categories of the Sports Car Club of America (SCCA). Although the American market, dominated by large family chariots, resisted the idea of purchasing a two-seat sports car, it embraced the car’s concept.

While the Fairlane Committee was working on the recipe for Iacocca’s idea, Ford’s Market Research department conducted a survey of the market’s perception of the concept. The survey showed that a sporty Mustang-type car would most likely be a second car in a large car or station wagon family, or the first car for Iacocca’s youth market. As such, it needed room for four, a couple of bags of groceries or sports equipment, or a shopping day’s worth of packages. Obviously, the Mustang I did not meet those requirements.

Roy Lunn further qualified the survey results in his January 1963 paper, The Mustang, Ford’s Experimental Sports Car, for the Society of Automotive Engineers (SAE). Sports cars by their nature are controversial: they arouse the interest of the adolescent (and of those reaching second childhood; they excite the otherwise calm) and accentuate the egotistical; they are admired by many, and purchased by comparatively few. Iacocca was going in the right direction, but he needed a revised car to increase both the excitement factor and the appeal to the potential market.

The Wide-Open Spaces

Iacocca’s ad agency, J. Walter Thompson, argued that the Mustang name had the excitement of the wide-open spaces and was as American as hell. That argument helped finalize the name’s selection. Whether or not the agency was aware of a 40-year-old precedent to the wide-open spaces theme is open to speculation.

Consider the Jordan Motor Car Company. In 1923, Ned Jordan, famous for his ad prose, released an ad titled Somewhere West of Laramie. Modern advertisers view it as one of the best, if not the best, automotive ads ever. It was the first to promote the romance of the automobile, not just its mechanical properties.

The romance aspect in following Jordan ads inadvertently drew the irate attention of moralists. They perceived one ad in particular, The Port of Missing Men, as implying more than just innocent romance. Substitute Ford Mustang for Jordan Playboy in the text and see if the West of Laramie ad copy fits Iacocca’s and J. Walter Thompson’s marketing vision for the Mustang.

The similarities between the Mustang I and Ford GT are obvious. The shovel-like pointed nose and wheel arches are nearly identical in these two renderings. The side air scoops are different, although the concept is perceptible. Imagine the Mustang I with a tapered roofline, instead of the roll bar, and the connection is complete. (Photo Courtesy Ford Images)

The feedback and early surveys meant that the Mustang I concept’s death was a foregone conclusion, even while being introduced at Watkins Glen. Thus came the next concept Mustang. Mustang II was a little of what the original Mustang was and a whole lot of what it was not. The new concept was where the Mustang family tree split into two branches. The mechanical and design aspects inspired the Ford GT family. The overall concept inspired the production side of the family, even though the two cars looked nothing alike. The Mustang II represented the market lessons learned from the trail-blazing Mustang I. The new version had room for four, a compact but usable trunk, agile handling, an attractive price, and styling that rattled the design studio doors of the other car manufacturers.

What’s in a Name?

Some of the names submitted for the production car were Cougar, Puma, Monte Carlo, Monaco, Bronco, Cheetah, and Colt. In his book, Iacocca: An Autobiography, Iacocca notes that, When it comes to naming a car, there’s always a battle. And for good reason: the name is often the toughest part of the car to get right. It’s easier to design doors and roofs than to come up with a name, because the choice is inevitably subjective. The Edsel was a flop, all by itself. Imagine how much worse it would have been if the suggested Edsel badge of Utopian Turtletop had been transferred to the Mustang. The memory of the Edsel fiasco probably was a sour lemon drop to some of the executives judging the name candidates.

The inspiration for the official Mustang name allegedly came from the World War II P-51 Mustang fighter plane. However, Ford Marketing believed associating the production car with war would be a mistake. Their task was to associate the Mustang with the wide-open spaces, a wild Mustang horse running with the wind under blue western skies. Regardless of a combat plane or a wild horse perception, Lee Iacocca’s car entered production, and history, as the Mustang.

Why the fuss over a couple of prototype cars, instead of Kar-Kraft, the topic of this book? Because the Mustang I laid the simplistic groundwork for the creation of Kar-Kraft. The Mustang I was the seed from which the flower grew. It proved that Iacocca’s concept of youthful excitement was accurate. It showed Henry Ford II that his company and a small collection of enthusiastic engineers were capable of designing excitement into a car that could compete in the world of the small sports car market. It confirmed Roy Lunn’s belief that skirting corporate procedures resulted in much better projects delivered much faster. Hot Rod magazine recognized the Mustang I as the progenitor of the GT 40. The Ford GT 40 is actually an extension of the concept used in the original Mustang.

Lunn supported Hot Rod’s evaluation in his January 1967 SAE paper, The Ford GT Sports Car, writing, The information which evolved from the Mustang I study served as the basis for concept work on the GT sports car. The creation of the Mustang I showed that Ford could accomplish some aspects of the project internally, but an independent outside shop was necessary to bring the project together. The Mustang I also encouraged Iacocca to look for other car models and business plans to achieve automotive excitement.

Fortunately, for posterity, the Mustang concept cars did not go to the crusher. The Mustang I sits in a place of honor on the floor of the Henry Ford Museum in Dearborn, Michigan. The Mustang II resides in the Detroit Historical Museum.

THE SUSPENSION COMPUTER PROGRAM

Chuck Carrig was a young Ford employee working for Klaus Arning in the Suspension Department. He had bachelor’s degrees in mechanical engineering and engineering mathematics. Ford’s new IBM 704 mainframe computer, a room-sized monstrosity with the ability to run a whopping 40,000 calculations per second at only $400 per hour, attracted him. Carrig wrote a Fortran program, named PG1493, which could calculate X-Y-Z suspension coordinates.

It was a breakthrough in suspension design. In a very short time, the computer program could calculate and recalculate the data and print out new results. All those changes and re-drawing graphs could take several days to arrive at the desired curves. However, the time was only a fraction of that necessary to calculate each increment manually. A single computer run could show suspension points that took a single designer 23 weeks to create.

In spite of the computer program’s apparent capabilities, management balked at funding or using it. The attitude seemed to be, If we aren’t building production cars with four-link independent rear suspensions, why do we need to invest in developing a computer program? This is where Roy Lunn stepped in.

Lunn was aware of Carrig’s PG1493 program. His background in racing four-link rear-suspension cars told him that the program would be perfect for the company’s first four-link project, the Mustang I. Lunn provided funds to Klaus Arning, Carrig’s manager, for Carrig to polish the program and help develop the suspension for the Mustang I. The Mustang I suspension design was not simple, compared to the familiar leaf spring and solid axle system.

However, it was simple enough to serve as a first test of the program. The difficulty was arranging the four-link design to make the suspension move toward toe-in on jounce. The amount of jounce and rebound travel varied with the suspension. The handling of the Mustang I turned out to be very good, especially for a one-off prototype. Lunn and Bob Negstad went on to employ PG1493 for all the upcoming race cars. PG1493 eventually became a regular step in designing new suspensions for all Ford vehicles. As of 2007, the basic concept was still in use.

Carrig designed the program to illustrate how an engineer’s suspension design acted. Each suspension point, up to 50 points, had a number assigned to it. The numbered points were the same for all suspensions on all cars. For example, all upper ball joints might be 01, all lower ball joints 02, spindle centerlines 10, wheel centerlines 15, and so on. The designer wrote an input data sheet listing the x, y, and z coordinates for the suspension points he thought would produce the result he wanted. A computer operator transferred that data onto punch cards for the computer to read. The computer program then spit out a stack of data sheets listing the data point coordinates as the program moved the wheel up 4 inches (jounce) and down 5 inches (rebound). The designer analyzed the results to determine what looked best. If the graph, hand-drawn from the data, did not turn out as expected, the designer could move a point and re-run the program.

Negstad first used the PG1493 program on the Mustang I. He used the program again to help convert the Lola GT-6 suspension to GT 40 specifications. Chuck Carrig ran the data through the program and sent the results to Negstad at Ford Advanced Vehicles (FAV). When tested on the car, the suspension curves worked fine. Next up, Arning assigned Carrig and Bob Negstad to help Shelby with his ill-handling new 427 Cobra. Negstad went to AC Cars in England and plotted all the pick-up points. He sent that data to Carrig, who ran them through the computer and sent the results back to Negstad. Kar-Kraft called upon Carrig’s program for the GT 40. When Ford decided to wrap the GT 40 around a 427 engine and call it the Mk II, the computer went into action again.

Arning vs. Lunn

Klaus Arning was a German immigrant who became Ford’s top suspension engineer. He and Roy Lunn were familiar with each other from the Mustang I and other projects. Both were pilots in World War II, Arning with the Luftwaffe and Lunn with the Royal Air Force. The opposing pilot coincidence naturally opened the door to stories and jokes by their employees. Most were good-natured, but some were a bit snarky.

The punch-card system drastically reduced the time to calculate suspension. The process was a bit awkward, by today’s standards, but it did make work for the engineers easier. Ed Hull described how he worked all day developing the points, dropped the punch card data off in the computer room on his way home, and picked up the finished run the next morning.

FORD MEETS FERRARI: SHOPPING FOR A RACE WINNER

The news in Detroit was big. Goliath wanted to buy David. Newspapers and magazines poked about, seeking official and unofficial leaks, speculations, and rumors. Would Ford really buy Ferrari? What would Ford do with Ferrari? What would happen if the deal fell through? The last question became the news leader. The deal did fall through and what happened next became legendary in the worldwide automotive industry.

An Invitation to Dance

In February 1963, Ford’s finance group in Cologne, Germany, received a letter, asking if Ford might be interested in acquiring an independent Italian car firm. The name of the firm was thinly disguised as a small but nevertheless internationally known Italian auto factory. The letter went to Ford International, which had no interest in the matter and let it drop. Unbeknownst to International, there was already a loosely related interest in Dearborn, not in the letter, but in the small Italian company. Lee Iacocca wanted Ferrari.

The world was kept aware of the courtship and ultimate falling out of Ford and Ferrari.

Iacocca had already considered Ferrari as a possible enhancement to Ford’s image. Ferrari’s engineering could boost the performance of his Ford Division cars. The styling, although not done in-house at Ferrari, could make the other Detroit manufacturers’ products look like chickens wearing socks. Iacocca’s thinking may have been along the lines of General Motors’ Body by Fisher tag line. Body by Ferrari or Powered by Ferrari seemed much more exciting than GM’s mundane logo. This is speculative, but reasonable.

Iacocca and Don Frey, assistant general manager of the Ford Division, previously discussed acquiring Ferrari but, at the time, it was only casual what if? talk. Now the talk was serious. Both men were still unaware of Ferrari’s contact with Ford’s corporate Italian branch. When the decision to court Ferrari finally solidified, Iacocca had Filmer Paradise, Ford of Italy’s president, approach Ferrari. Dearborn’s interest pleased Il Commendatore Ferrari. He most likely assumed that the contact was a response to his earlier feeler. The desire to ensure funds for racing drove his interest in a partner. For that, he was willing to sacrifice the production side of his company.

The Romance Begins

Don Frey was Iacocca’s point man in the first meeting with Ferrari, at Maranello. He continued as Ford’s chief negotiator throughout the proceedings. At first, the meetings were cordial. Frey and Ferrari developed a mutual respect for each other. Ferrari seemed comfortable enough to doodle Ford-Ferrari or Ferrari-Ford logos during the talks.

Ferrari’s positive reaction to Iacocca’s approach set the Ford machine in motion. Fact-finding teams from engineering, bean counting, product development, manufacturing, and other disciplines lined up at the gates of Ferrari’s Maranello headquarters. They crawled in, over, under, and around every inch of Ferrari’s factory, books, and holdings. Chuck Mountain, who was in line to be Ferrari’s production vehicle manager, pored over innumerable plant and manufacturing drawings. Mountain later became Ford’s on-site manager at Kar-Kraft, after its post-Ferrari formation.

Ferrari’s marque is a black prancing horse on a yellow background, usually with the letters S F for Scuderia Ferrari. The horse symbol was of Count Francesco Baracca, a World War I Italian flying ace who died in combat. Baracca’s mother asked Ferrari to use the emblem for luck. The symbol has remained unchanged ever since.

Enzo Ferrari, the Alfa Romeo team race driver. Ferrari’s intense focus was on racing and winning. In the 1950s and 1960s, his cars dominated Grand Prix and top-level sports car racing. Manufacturing customer road cars was secondary, a nuisance tolerated only for the money it provided to his racing activities.

The engineering and financial reports to Dearborn were favorable; Ferrari was a beneficial asset. At that, Ford’s lawyers then lined up to meet with Ferrari’s lawyers and management. Ferrari’s background highlights the general status of European car manufacturers. Alfa Romeo, Maserati, Jaguar, Mercedes, Austin-Healey, Lotus, Peugeot, Renault, and others all had decades of experience building road racing cars and competing in road races. Ford’s management believed that cubic dollars could equal those decades of experience in one year. No one, except Ford management, was surprised when Ford’s road racing program failed miserably in its first year, and again in its second.

The negotiations, though, became a clash of business cultures: the American buttoned-down corporate way of doing things versus the patrician and somewhat egotistic Italian way. The clash profoundly affected the negotiations’ outcome.

The Romance Sours

As the talks progressed, Enzo Ferrari became more and more put off by the Americans’ procedures and manners. The circus of lawyers, the questions, inspections, and minutia all gnawed at him. Ferrari had built an empire of which he was the sole ruler and reason for its existence. He was a man of honor and justifiable pride, unaccustomed to having his authority questioned. He felt that Ford did not respect his pride and honor. Ferrari felt insulted. He wanted out. Or, had he ever wanted in to begin with?

Fiat was a longtime supporter of Ferrari, in the form of a modest allowance for the status his road cars and race cars built for the Italian car industry, the status Iacocca was seeking. There is a reasonable probability that Ferrari was working on a deal with Fiat that would bring in much more cash for his racing habit. The deal most likely involved Fiat purchasing Ferrari outright or, at least, a stake in Ferrari. Although that did not happen during the Ford negotiations, Fiat did acquire 50 percent of Ferrari in 1969. It appears that Ferrari may have been playing Ford as a card in his negotiation deck with Fiat.

Ferrari’s official website summarizes the racing successes of the cars. It also mentions the Ferrari-Fiat deal. However, there is no mention of the negotiations with Ford.

The Romance Ends

Whether or not Fiat was a factor in his negotiations with Ford, Ferrari started throwing last-minute new demands on the table. He was trying to discourage Ford. Some demands were met by Ford, but others strained the negotiations and could not, or would not, be met. One Ferrari demand stipulated that Ford could not enter competitions, even Indianapolis, with anyone but Ferrari. This obviously aimed at the established Shelby–Ford arrangement and was not acceptable. It seems that Mr. Ferrari and Mr. Shelby once had a disagreement over a proposed racing partnership. Theirs was over a proposed hiring of Shelby as a Ferrari team driver.

SETTING THE STAGE

On December 3, 1963, Lee Iaccoca addressed a Blue Letter to Henry Ford II and his two top men. It outlined the Le Mans program objectives and the progress toward the objectives. It also listed the accomplished segments of the program and future objectives.

This letter pretty much kicked off the Le Mans program. It summarized the plan and objectives Frey approved on July 12. The second sentence confirms Henry Ford II’s personal displeasure with the Ford/Ferrari negotiations. The letter outlines what the program would do, how Ford would do it, what it would accomplish, and how the program outcomes would benefit Ford.

The Blue Letter format was for vice presidents and the alpha male. The paper was actually blue; therefore, the blue designation. Note the reference to the T-5 code name for the production Mustang in Objective III.

The disagreements apparently fueled a get even attitude on the parts of all three men, even though Shelby was not a part of the negotiations. However, he was close enough to Henry Ford II to voice his opinions. When Frey told Ferrari he could only race on a Ford-determined budget and could