Running head: Ford Pinto Case Study – Was Ford to Blame in the Pinto Case?
Taking a Side
Mayo Smith, George Deese, Josh Eubank, Mignon Waller, Michelle Stower and Jaime Arnold University of Phoenix
Take a Side
Bad business decisions can be seen throughout history; however none has stirred such controversy as the error made by Ford Motor Credit concerning the 1971 Ford Pinto. Despite many safety concerns Ford CEO, Lee Iacocca and Ford executives began the production and distribution of the 1971 Ford Pinto. During routine safety tests of production models, it was discovered that every Ford Pinto tested and sustained a ruptured fuel tank during a slow to moderate speed rear end collision. The resulting fireball could cause severe burn injuries and even death to its occupants. Ford engineers designed a solution. By installing a baffle between the gas tank and the rear bumper, the threat of it possibly rupturing was nearly obsolete. These modifications would only have cost $11 per vehicle to complete. After conducting a cost/benefit analysis, Ford estimated that the cost of lawsuits and the amount Ford would have had to pay (estimated at more than $50 million), far exceeded the amount saved ($20.9 million), by not installing the baffle (De George, R., 2006).
How can a major corporation put a price on human life? Had I been involved in the dilemma concerning the Ford Pinto, I would have somehow convinced Lee Iacocca and the executives at Ford to install the baffle. I would have gone to the press and the U.S. government with my concerns over the safety of this vehicle. Iacocca wanted a car that would cost under $2000. Instead of raising the price of the Pinto, the profit margin for Ford could have been decreased. The stakeholders certainly would have agreed considering the safety concerns. It was only going to cost $11 per car which would have been a total of $20.9 million; a small price to pay considering how many Pintos sold between 1971 and...
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