How Ford Nearly RUINED the MUSTANG in the 1980s

The Ford Mustang. It’s undoubtedly and undeniably one of the most iconic cars in the entire world, but also particularly here in the US, where everyone, including your average grandma, is driving pony cars.

And when it first hit the market all the way back in 1965, it absolutely blew up in popularity and sales by finally bringing an affordable “sports” car that the average could feasibly own and enjoy.

Since then, the Mustang has gone through six different iterations, totaling up to seven generations. But, what if I told you that in the 1980s, Ford nearly killed the iconic pony car by turning it into a front-wheel econobox?

It sounds crazy, but it’s true and pretty wild. So stick around, and let’s dive into the story of the front-wheel-drive Mustang that nearly came to be. Let’s go.

The Oil Crisis of the 1970s

There’s not exactly one clear point where we can start this story definitively, but you can most definitely point to the oil crisis of the early 1970s, which basically strangled American cars and particularly the Mustang, nearly to their death.

And you also have to remember that in the 1970s, other sports cars were popping up in the American car market and taking away from the Mustang’s domination in that segment. Cars like the Datsun 240z we’re debatably in many ways, particularly including handling and fuel efficiency.

And that’s not to say that the first generation Mustang from 1965 to 1973 was a poor-handling car, as it was decently lightweight and not nearly as boaty as the full-sized muscle cars of the time. Regardless though, one of the driving forces behind the original first-generation Mustang, Lee Iacocca, became the President of Ford Motor Company in 1970.

In his eyes, the upcoming second generation of Mustang needed to be smaller, nimbler, more fuel efficient, and more or less, not a pony car, at least not initially. The idea of a smaller and more fuel-efficient Mustang is how we ended up with the second-generation Mustang, simply known as the Mustang II.

And for those who know their Ford history, you already know this, but it’s safe the Mustang II was not very loved and still isn’t to this day. But realistically, it wasn’t a flop, at least not right off the bat, with sales hitting 400k units in the first year of the Mustang II’s arrival.

The Rise and Fall of the Foxbody Mustang

Moving up to the third-gen Mustang, it was based on the much larger Fox platform which is where we get the name Foxbody Mustang. And while that car yet didn’t look much like the original Mustang, it’s since become a phenomenal car and platform for all sorts of motorsports ranging from drifting to drag racing.

But, by the mid-1980s, the US car market had been flooded with Japanese econo cars like the Acura Integra and Toyota Celica. Not only were these cars vastly more fuel efficient than the Foxbody Mustang, they were also lighter weight and pretty fun to drive.

Sure, it didn’t have the 5.0L Windsor V8 sound and power, but it was getting hard for Ford to deny the popularity of these front-wheel sporty economy cars from Japan. And well, Ford didn’t want to get left in the dust.

They saw the popularity of these new front-drive cars from Japan, and they thought the best chance for the Mustang’s survival was to also go in that direction. If you can’t beat them, join them.

There was only one problem: Ford wasn’t exactly an economy car producer at that time. In 1987 they were offering the Bronco, Bronco II, E-series vans, Escort, F150, F250, Crown Vic, and so on.

The large majority of their cars and the engineering around those cars weren’t very optimized for fuel efficiency. But that wasn’t actually that big of an issue thanks to their at-the-time growing relationship with Mazda.

And the idea was simple: develop the “new Mustang,” which was intended to be the fourth generation Mustang on the same platform as the Mazda 626.

And it’s not like Ford was looking at the Mazda 626 platform for no reason, as they saw the Mazda MX6 on that platform and that had turned out to be a decent little two-door sports car that was pretty lightweight and fun to drive, although you could argue it was already more boring of a car than the existing third-generation Mustang.

And again, I think it’s important to note the increased fuel pricing of the 1970s and 1980s that were slowly crushing the sales of the Foxbody Mustang. And it’s not like Ford was the only company considering switching their existing muscle or pony cars to front-wheel-drive, as GM was planning on doing the exact same thing with the Chevy Camaro and Pontiac Firebird.

Leaked to the Public

Unfortunately for Ford, their pursuit of turning the upcoming fourth-generation Mustang into a front-wheel-drive turd ended up being leaked to the public around mid-1987 and specifically really blew up thanks to a column in the July 1987 issue of the Mustang Monthly.

“As much as I try to rationalize the whole deal, I just can’t force myself to accept Ford’s intended future for the Mustang. Call me old-fashioned or sentimental or just plain stubborn, but a Japanese car, even one built in America, is a Japanese car, and I’m not prepared to see a Mazda with the Mustang name and running horse emblems affixed to its fenders. After the Mustang has clawed its way to the top of the pony car heap once again, Ford plans to turn it into a front-wheel-drive copy of a Japanese car. Un-American, I say.” – Donald Farr, Editor at Mustang Monthly.

Ford Reversing Their Decision After Outcry

And thanks to that column, plus every other automotive outlet also jumping on the topic at nearly the same time, it got to Ford. And it wasn’t just the media companies stirring up a storm.

It was also all the Ford enthusiasts who wrote sent Ford letters en masse, telling them to keep the Mustang as a rear-wheel-drive performance car and not change it to something it’s not.

And kind of surprisingly, Ford listened. All the complaints were heard. The individual enthusiasts, the Mustang clubs, and the media. Ford heard it all and they responded.

But considering the money and time put into the development of this new front-wheel-drive car, they couldn’t just abandon it entirely.

Instead, that car turned into what we now know as the Ford Probe. But it was kind of done out of spite, as Ford executives still expected the now Ford Probe to easily outsell the Ford Mustang because, again, the Japanese automakers were seeing massive success with their front-wheel-drive cars, but execs were off by a bit.

As the Foxbody Mustang continued to be sold just as before, it pretty easily outsold the Ford Probe across the nation, which then prompted Ford to develop the next generation Mustang as a rear-wheel-drive car.

SN95 FWD Developments

That being said, they were quite persistent, and the SN95 Mustang development was done on both front-drive and rear-drive platforms. And strangely enough, they wanted to offer a front-drive Mustang, but not necessarily as an economy car, but rather with the upcoming 4.6L V8.

Luckily, despite a ton of money and development time, Ford was unable to get a transaxle that could handle the power output, and they also realized that it probably wouldn’t sell, so they stopped the development of the front-wheel-drive SN95 in 1990.

After all of this, we saw Ford finally return to the development of rear-wheel-drive Mustangs, which then gave us the SN95 Mustang, the S197 Mustang, and so on. It would’ve been interesting to see what would’ve happened had Ford basically killed the Mustang.

By looking at the Ford Probe sales, it’s pretty plain to see that the executives at Ford had it wrong. Yes, Japanese front-wheel-drive cars were selling like crazy, but that didn’t mean prospective car buyers wanted to buy the same thing from Ford.

Sometimes not going with the crowd is the superior option in the long run, and as we saw with the Mustang, staying true to its “pony car” roots is what allowed it to survive all the way up until now in 2023.


So, that’s the story of how Ford nearly completely killed the Mustang by attempting to transform it from America’s most iconic pony car into a front-wheel-drive turd, which they then turned into the Ford Probe and then developed the SN95 Mustang, but not after also testing the SN95 as a front-wheel-drive V8 powered car.

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