LS501 - Smith
Unit 2 Assignment - Case Study
Due: 17 January 2012
The Ford Pinto case study provided an interesting insight into the automotive industry. The fact that an automobile manufacturer was willing to allow a product onto the streets that had the potential to maim or kill someone is astounding. This paper will analyze the case further and investigate ethical and moral issues found in the Ford Motor Company’s decisions.
Events in the Case and Their Causes
The Ford Motor Company sought to create a vehicle on par with those being imported from Japan. Those vehicles were not known for their overwhelming quality, but for their competitive price point. Ford sought to create a vehicle that weighed less than two thousand pounds and cost no more than two thousand dollars (Shaw & Barry, 2010). The model that Ford created in an expedited fashion was the Pinto, which is now well known for its exploding gas tanks. The Pinto’s chief weakness was its gas tank, which would leak when the vehicle was struck from behind. The NHTSA was in the process of mandating that all 1972 and newer vehicles pass a rear crash test at twenty miles per hour and that speed would go up to thirty the following year while the Pinto was in development (Shaw & Barry, 2010). The Pinto did not pass the rear crash test. Because the NHTSA regulation was merely in development stages, Ford elected to produce the Pinto without improvement to the structural integrity of the gas tank and its components. All Ford would have had to do to reinforce the gas tank was insert a piece of steel between the rear bumper and gas tank costing no more than eight dollars (Shaw & Barry, 2010).
Ford’s rationale behind producing the vehicles as-is is troubling. The company performed a cost-benefit analysis, defined as “an analysis in monetary terms of the expected cost of doing something” (Shaw & Barry, 2010). Ford’s analysis showed that the risk of death and dismemberment was not too great as to recall the Pinto to repair the gas tank issues. It stood to make approximately one hundred million dollars in spite of the money allocated to paying for issues that arose from the car’s problem. It was not until 1976 that the NHTSA’s thirty mile per hour test was adopted and Ford was forced to place impenetrable gas tanks into its Pinto. In spite of a criminal homicide case brought upon Ford in 1980, the company still “denied that the Pinto is unsafe compared with other cars of its type and era” (Shaw & Barry, 2010). Ford’s Ethical Misgivings
The Ford Motor Company put a vehicle on the roads knowing that it had the potential for hazardous reactions to rear end collisions. The decision to put an unsafe vehicle onto America’s streets was done because a cost-benefit analysis revealed that it would cost too much to strengthen the gas tanks and potentially save lives. According to the case study, this decision led to what critics believe to be a staggering five hundred deaths which (Shaw & Barry, 2010). Some fifty lawsuits were brought upon the company and while a jury awarded one hundred twenty five million in damages, the judge in the case reduced that amount to three million five hundred thousand (Shaw & Barry, 2010). This was a very egoist approach in which Ford looked only after its own interests. The potential loss of lives was of no consequence when Ford sought to increase its profit margin by creating a domestic automobile to compete with similarly priced autos from abroad. The fact that Ford was found not-guilty in a criminal homicide case only bolstered its decision and likely caused questionable decisions to be made since then. It is interesting to apply this to current issues in the automotive industry and the constant battle for the label of top domestic automaker. Consequences
The consequences of Ford’s actions have caused a number of deaths and injuries that may not have been necessary. The most...