Ethical Issues

In 1994, a group of Chrysler engineers met to review proposals and recommendations for improving their Chrysler Minivan lines in order to make them more competitive. Paul Sheridan, one of the engineers on Chrysler 's Minivan Safety Team, raised the number one issue on the lists of proposals and recommendations: The latches on the minivan rear doors appeared to be popping open even in low-speed crashes. The Chrysler Minivan latches did not appear to have the strength of either the Ford Windstar minivan or the Chevy minivan rear door latch. Mr. Sheridan proposed that Chrysler make the latches stronger and use that strength as a marketing tool.
After Mr. Sheridan made his proposal, and according to testimony in a subsequent product liability suit, a top production engineer told Mr. Sheridan , "That ship has sailed. We told you that last time. Next subject."
In Jimenez v Chrysler Corporation, 269 F.3d 439 (4th Cir. 2001), the jury deliberated only 2.5 hours before returning a verdict for the Jimenez family of $262.5 million, $250 million of which was punitive damages.
Chrysler agreed with the National Highway Traffic Safety Administration (NHTSA) to replace the latches on 4 million minivans manufactured since 1984. Chrysler has spent $115 million for that replacement program on everything from notification to installation and estimates that about 61 percent of the van latches have now been replaced.
The number of deaths from ejection through the rear minivan doors is 37, which is 11more than the fatalities from the Ford Pinto exploding gas tank defect but well short of GM's 168 fatalities in side-saddle gas tank collisions in that company's pickups. Chrysler has 40 lawsuits pending around the country that involve rear-door ejection deaths and injuries.
However, damaging evidence brought out in the Jimenez case tends to be the focus of jury interest and award'.
Chrysler initially used a latch in its vans that the rest of the industry had abandoned.
When it switched to a better latch, still not meeting federal standards for passenger vehicles, it did not notify the owners of existing vans of the change and safety issues. * Chrysler destroyed documentation on minivan crash tests, including films and computer records. (The company :;ays that such destruction was part of its routine document destruction program; however, a juror noted, following the trial, that only the documentation on the collisions in J
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which the rear door was affected was destroyed. Chrysler still had the documentation on the vans' front-end collision tests.) * Engineers proposed adding a latch strengthener for a cost of about $0.25 per vehicle in 1990, but the plan was vetoed by Chrysler executives because it was believed such an addition would be tantamount to an admission to regulator s that the latches ·were not safe, and Chrysler had been taking the position that the latches were indeed safe. * Chrysler used politica1 clout to prevent a 1994 recall by NHTSA of the vehicles for latch replacement; a letter from Chrysler Vice Chairman Tom Denomme to Chairman Robert Eaton and President Robert Lutz read, “If we want to use political pressure to try to quash a recall letter, we need to go now." Chrysler officials helped staff members for Representative John Dingell of Michigan (the ranking Democrat on the House Commerce Committee, which supervises the NHTSA) draft a letter objecting to the recall. NHTSA postponed the recall. When the recall was made in 1995, there was no acknowledgment that the latches were defective or that there was any safety issue. *
Following the verdict, one juror said the evidence painted a picture of corporate indifference and added, "We want people to understand why we made the decision we did .We knew ·what we were doing. When you speak to a company as big as Chrysler, you've got to speak on terms they understand." Another juror said that the political interference with the recall ·was an 8 on a scale of 10 for damage to the company. Still another juror noted that executives answered, "I don't know. I don't remember. I can't recall," too often to have much credibility.
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Chrysler had been the first mover in the minivan market. Its product filled a niche in the family auto market, and it occupied a unique position in terms of federal regulation in that there were no applicable federal standards for the lifting rear door on the van. Chrysler used latch designs and parts that had been banned in passenger vehicles for years precisely because of the risk of ejection and associated high fatality rates. However, the lack of federal regulations on the minivan meant that Chrysler violated no law in using the outmoded systems and parts.
When Chrysler began to receive notice of accidents and began holding design and marketing meetings in 1993, lawyers ordered that no notes be taken at meetings, and minutes of meetings were collected and destroyed.
Why were punitive damages appropriate in this case? Are they too high? What message do the punitive damages send to businesses? What should Chrysler do internally to be certain such a series of events does not happen again?

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