It wasn't just those two cars. The 1980s were the decade in which American carmakers hit the bottom and came out pretty good at the end.
Interestingly, both the Mustang and the Thunderbird of the '80s were based on the Fox platform.
In 1989, the Thunderbird emerged as a completely redesigned Thunderbird. It has independent rear suspension, a supercharged and intercooled V6, and was in total a significantly better and better-looking car. By 1994 it had the 4.6L version of the new modular V-8. But the market for this type of car was shrinking, and in 1997 Ford discontinued the T-Bird.
The Mustang--which IMO did not get hideous during the '80s, just old--did not get a new platform until 1994, when it went from the Fox platform to a modified Fox called SN-95. It got an all-new, much-smoother, much-more-reminiscent-of-earlier-Mustangs body. No more hatchback. No more notchback coupe. Just a fastback and a convertible. After I think 1 year, the old 302/5.0 pushrod V-8 was replaced by the 4.6L modular engine. This was the basic design of what would grow into the Coyote in 5-liter size.