Preview

The Ford Pinto Case

Powerful Essays
Open Document
Open Document
9301 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
The Ford Pinto Case
THE FORD PINTO CASE:

THE VALUATION OF LIFE AS IT APPLIES

TO THE NEGLIGENCE-EFFICIENCY ARGUMENT

Christopher Leggett

Law & Valuation

Professor Palmiter

Spring, 1999

Abstract

Text of Paper

--------------------------------------------------------------------------------

Abstract

The cases involving the explosion of Ford Pinto's due to a defective fuel system design led to the debate of many issues, most centering around the use by Ford of a cost-benefit analysis and the ethics surrounding its decision not to upgrade the fuel system based on this analysis.

ISSUE

Should a risk/benefit analysis be used in situations where a defect in design or manufacturing could lead to death or seriously bodily harm, such as in the Ford Pinto situation?

RULE

There are arguments both for and against such an analysis. It is an economically efficient method which has been accepted by courts for numerous years, however, juries may not always agree, so companies should take this into account.

ANALYSIS

Although Ford had access to a new design which would decrease the possibility of the Ford Pinto from exploding, the company chose not to implement the design, which would have cost $11 per car, even though it had done an analysis showing that the new design would result in 180 less deaths. The company defended itself on the grounds that it used the accepted risk/benefit analysis to determine if the monetary costs of making the change were greater than the societal benefit. Based on the numbers Ford used, the cost would have been $137 million versus the $49.5 million price tag put on the deaths, injuries, and car damages, and thus Ford felt justified not implementing the design change. This risk/benefit analysis was created out of the development of product liability, culminating at Judge Learned Hand's BPL formula, where if the expected harm exceeded the cost to take the precaution, then the company must take the precaution, whereas if the

You May Also Find These Documents Helpful

  • Good Essays

    A product with a faulty design exposes its users to unnecessary risks, and products must be designed with all foreseeable uses in mind. Cars must be designed in view of the probability of accidents.…

    • 820 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Ford Pinto Case Study

    • 537 Words
    • 3 Pages

    From reading the two assigned papers discussing the Ford Pinto fires, it is easy for someone to judge Gioia’s decisions as fallible before all the factors are in place. For example, the culture of the Ford motor company at the time, Gioa’s mental state. I believe he feels very responsible and that is why he wrote the paper and uses it as a living case study in his MBA classes.…

    • 537 Words
    • 3 Pages
    Good Essays
  • Best Essays

    General Motors (GM) is one of the oldest and largest car manufactures in the United States. As early as 2001, the company began to notice issues with an ignition switch that was to be used in many car models. The problem with this switch was that a driver could “inadvertently knock them to ‘off’ or ‘accessory’ mode while driving” (Plumer, 2014). If this happened, “the engine would shut off and cars would lose their power steering and power brakes” as well as the airbags “wouldn’t inflate in the event of a crash” (Plumer, 2014). Allowing this problem to not be fixed led to many crashes and fatalities across the United States. After several years this eventually led to the recall of millions of cars and thousands of lawsuits for GM. This is an ethical issue because GM was knowledgeable of the problem and made a decision to ignore it which led to the deaths and injuries of many innocent people. In order to evaluate this ethical situation we will…

    • 3185 Words
    • 9 Pages
    Best Essays
  • Powerful Essays

    Ford Pinto Case

    • 937 Words
    • 3 Pages

    In this essay, I will talk about the ford Pinto case, and how the information was withheld from public in order to save company from huge losses and at the same time keep company’s reputation intact. I don’t think the decision of the ford company to with hold the information about the safety-issue of the car for which they were already aware of; was the right thing to do.…

    • 937 Words
    • 3 Pages
    Powerful Essays
  • Good Essays

    After analyzing the cause of the crash, experts identified that there were significant design deficiencies of the Pinto made by Ford Motor Company and the company was knowledgeable of these deficiencies before launching it into the market for consumers.…

    • 1441 Words
    • 6 Pages
    Good Essays
  • Good Essays

    2. Ford discovered that the fuel tanks position was in a 'vulnerable place' and the car failed to met crash safety standards.…

    • 747 Words
    • 3 Pages
    Good Essays
  • Better Essays

    Ford Pinto- Ethics

    • 1525 Words
    • 7 Pages

    Because Iacocca wanted the Pinto released with the 1971 vehicle models, the production planning period was dramatically reduced from three and one-half years to approximately two years. Additionally, he implemented a specific goal known as "the limits of 2,000" (Gioia, n.d.). This goal meant that the Pinto could not cost more than $2,000 and could not weigh more than 2,000 pounds. Consequently, the rush for completion led to the Pinto 's inadequate gas tank design resulting in the tank exploding upon contact in rear-end collisions. Despite crash test results that made Ford fully aware of the faulty tank design, Ford opted to stick with its original gas tank design rather than spend the extra $11 per vehicle. To correct the faults in design as identified in Ford 's cost benefits analysis…

    • 1525 Words
    • 7 Pages
    Better Essays
  • Good Essays

    Case of the Ford Pinto

    • 1565 Words
    • 7 Pages

    The Ford Pinto first rolled off the Ford Motor Co. production lines in 1971 and stayed in production in its original state until 1978. The vehicle engineers were tasked to develop the vehicle and put it into production within 25 months, which was nearly half the time in which the average new vehicle is put into production. The Ford engineers were aware that rear-end impact safety tests were pretty standard at the time, but they were not required by the National Highway Traffic Safety Administration at that time. The vehicle was rushed into production anyway to compete with foreign compact cars being developed by the Japanese during that time period. Only after the vehicle was made available to the public was the vehicle tested. The Ford Pinto ended up failing the rear safety test, due to the fact that it was susceptible to fire from rear end collisions. Ford engineers determined that the problem could be resolved by installing a baffle, which protected the gas tank from being punctured during rear-end collisions. The part would have only cost between $6.65 and $11 to be install, but the Ford Motor Co. determined through cost-benefit analysis that the cost of lawsuits would be less than the cost of installing the baffle and decided not to install the baffle. Ford Motor Co. also failed to notify customers of the problem and offer them the option to have the baffle installed. Between 1971 and 1978 the Ford Pinto would be involved in thirteen rear-end collisions that caused the vehicle to start on fire. The actions of the Ford Motor Co. were scrutinized for the production of the vehicle. (DeGorge)While the vehicle did meet the safety standards of the time, Ford Motor Co. knew of the problem and did nothing to resolve it. This leads us to the question the ethical actions of the Ford Motor Co. production of the Ford Pinto. After realizing there was a safety issue with the Ford Pinto, was it morally right…

    • 1565 Words
    • 7 Pages
    Good Essays
  • Good Essays

    The Ford Pinto Project

    • 1896 Words
    • 8 Pages

    The Ford Motor Company has been the leading car company for many decades. In the late 1960’s early 1970’s the company was losing the battle with Japanese with the small efficient cars. Lee Iacocca, Chief Executive Officer the Ford Motor Company wanted a car that will be competitive to these Japanese compact cars. With this intention in mind, the company wanted to manufacture a sub-compact vehicle that weighs less than 2,000 pounds and costs under $2,000. The result is the Ford Pinto. The Ford Pinto was one of the earlier sub-compact cars of the 1970’s. The Pinto was a catalyst in the revitalization of domestic compact cars at this time when Japanese imports were front rumors. Sure the car was simply affordable but had one flaw that would tarnish its reputation and the company’s. The Ford Pinto had fire hazard issues resulting from the placement and construction of the gas tank. When a Pinto is rear-ended the car would burst into flames resulting in an explosion. The company realized this concern during production. Because Iacocca wanted a fast sell of these cars records indicated that there was not a rear end collision test conducted until months after it was already in the market. Management did a cost analysis and determined that the cost of fixing the problem versus any lawsuits; it would be cheaper to pay for the lawsuits that would arise.…

    • 1896 Words
    • 8 Pages
    Good Essays
  • Good Essays

    Pinto Fires

    • 687 Words
    • 3 Pages

    b. If more time was taken to produce the car, the Pinto would have been a safer car…

    • 687 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Ford Pinto Case Brief

    • 407 Words
    • 2 Pages

    There was strong competition for Ford in the American small-car market from Volkswagen and several Japanese companies in the 1960’s. To fight the competition, Ford rushed its newest car the Pinto into production in much less time than it usually required to develop a car. The regular time to produce an automobile is 43 months; Ford took 25 months. Before production however, Ford engineers discovered a major flaw in the cars design. In nearly all rear-end crash test collisions, the Pinto's fuel system would rupture extremely easily. The technology was available to make the Pinto a safer vehicle. The best method for improving the safety of the Pinto was to line the gas tank with a rubber bladder. Ford alleged that it would cost $11 per car to add any sort of gas tank fire prevention device. Lee Iacocca, who was in charge of the development of the Pinto, had specifications for the design of the car that were uncompromisable. These specifications were that "the Pinto was not to weigh an ounce over 2,000 pounds and not cost a cent over $2,000." Any modifications, even if it did provided extra safety for the customer that brought the car closer to the Iacocca’s limits were rejected. A report was prepared for NHTSA by consultant; Eugene Trisko entitled "A National Survey of Motor Vehicle Fires." His report indicates that the Ford Motor Company makes 24 percent of the cars on the American road, yet these cars account for 42 percent of the collision-ruptured fuel tanks. Another staggering fact that was discovered was that a large and growing number of corpses taken from burned cars involved in rear-end crashes contained no cuts, bruises or broken bones. They clearly would have survived the accident unharmed if the cars had not caught fire. There was no single event that caused all of the deaths and injuries related to Pinto’s. Ford had many opportunities to limit the damage done by the faulty design of the Pinto. Engineers bowed to pressure from…

    • 407 Words
    • 2 Pages
    Good Essays
  • Better Essays

    Fords argument to the government was, “It would be cheaper in the long run to just let their customer’s burn!” How can this even be a dilemma or a problem? If that statement could be made, the vehicle is not the problem, the person in charge is. I have learned that in my attempts to save one dollar, in most cases the result is losing more. Although the text stated that Ford Pinto lost more than 50 million dollars in lawsuits and bad publicity, other text found on Engineering.com and Time.com states that Ford saved money by not correcting the problems. A summary table from Engineering.com states:…

    • 1638 Words
    • 7 Pages
    Better Essays
  • Satisfactory Essays

    Ford Pinto Case

    • 422 Words
    • 2 Pages

    External social pressures play a big part in the decision reached about the Ford Motor Company. When you have highly respected individuals such as retired NASA engineer Dr. Leslie Ball say “The release to production of the Pinto was the most reprehensible decision in the history of American Engineering” (Newton, Ford, 2007, p. 1); there is cause for concern. There would be more social pressure today as opposed to the 70’s simply because of the availability of internet. There were a number of options that Ford had that would of prevented the deaths of so many people yet it was not done until eight years after the release of the first model. Lee Iacocca’s favorite saying was “Safety doesn’t sell cars (Newton, Ford, 2007, p. 1)”. Society today would not tolerate nor accept that kind of philosophy from corporations today. Ethically or morally is it right to put value on a human life as Ford did when doing their cost analysis.…

    • 422 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    In 1968, Ford Motor Company made plans for a car that would be inexpensive, small, and appeal to all car buyers. The planned project was to meet the 2000/2000 rule, meaning that the Pinto could weigh no more than 2,000 pounds, and cost no more than $2,000. This rule was instituted because of the extreme competition from foreign car makers such as Toyota and all of the automotive companies at the time. However, the 2000/2000 rule left designers with limited ability to design a car the way it should be designed. The Pinto was brought into production faster than any other car had ever been produced; twenty five months from the inception of the idea of the Pinto to production when the industry average at the time was forty-three months. The engineers had to cut corners in the design and were rushed building the Pinto, which later resulted in many mistakes that were overlooked. The first Pinto was put on the market in 1971.…

    • 1085 Words
    • 4 Pages
    Good Essays
  • Good Essays

    * Ford Pinto: it had defects and automobile products that contributed to accidents and fatalities despite greater attention to safety features.…

    • 2303 Words
    • 10 Pages
    Good Essays