...Ford Motor Company Pinto Case Karen Nollet, Alonso Miller, Michael Morra, Pamela Tenori MGT/216 Abstract In 1971, Ford Motor Company (FMC), on the advice of then vice-president Lee Iacocca, introduced the first subcompact vehicle, the Ford Pinto. After production, Ford discovered a defect in the design on the fuel system; the gas tank was placed in the rear of the vehicle. This error could cause the vehicle to explode on low speed rear end collisions. Ford conducted a risk/analysis to determine whether to recall the vehicles or leave the situation as is and suffer the consequences as they arise. After concluding that the vehicles could be modified for $11 per vehicle, Ford decided not to recall the vehicles. Based on their risk/analysis the cost to recall the vehicles sold would be $137 million, Ford determined that it would be more profitable to leave the vehicles as is and pay out costs in lawsuits because this figure adjusted to $49.5 million, substantially lower than the cost to recall the product. Ethics and morals would appear to be ignored for profit and gain. Ford Motor Company Pinto Case Ford Motor Company Mission Statement (1996), “We are a global family with a proud heritage passionately...
Words: 1118 - Pages: 5
...Ford Pinto Case In the late 1960s Ford Motor Company developed the idea of the Ford Pinto. Foreign automobile such as Germans and Japanese manufactures dominated the small car market. Ford Motor Company did not want to stay behind in production. Chief Executive Officer, Henry Ford II and Lee Iococca’s rushed building new compact cars out in the market within two and half years which, was the Ford Pinto and the shortest production planning. Production and distribution of the 1970s Ford Pinto stirred controversy regarding safety concerns. Ford’s desire to compete with the foreign manufacturers led Ford to overlook known design flaws and their own ethics while in search of higher profits. Ford assigned a team of engineers to work on nothing but the Pinto. This team was required to stick to Iacocca’s goal of “the limits 2000”; this meant that the car could not weigh more than 2000 pounds. This became a challenge for the engineers and created concerns regarding the placement of the fuel tank. Because of the accelerated production the testing was not done thoroughly. Out of 11 Pintos subjected to rear end collisions, eight failed the test. Only the three with baffles between the tank and bumper and a special interior tank lining met safety standards. The project was almost complete, and it was not possible to make redesign revisions and meet the deadline for the release of the Pinto. The car met the requirements for the American public. It was not long before...
Words: 867 - Pages: 4
...Case Study Discussion and Executive Summary June 27, 2011 MGT/216 Case Study Discussion and Executive Summary This paper explores “The Ford Pinto Case” managing of business ethics. Numerous factors suggest within this research that Ford Motor Company was negligent and violated its code of ethics. To understand how relationships are affected a closer look at Ford Motor Company missions and values will align Team B’s personal values with Ford Motor Company. In this paper the study to examine are the role of people, products, and profits in the decisions made regarding the Ford Pinto. Key factors surrounding the Ford Pinto Case The death of Lynn Marie Ulrich, Dana Ulrich and Lynn’s sister, and Judy Ann along with many others was what brought the controversy of the Ford Pinto’s faulty gas tank placement to a climax. After so many unnecessary deaths the release of the Ford Pinto was the responsibility of Ford’s CEO Henry Ford II and Ford’s new president Lee Iacocca. Iacocca reduced the average production of a car from three and a half years to a little over two years. Iacocca was aware that during crash testing the Pinto’s gas tank exploded upon collision but was desperate to expedite the vehicle’s release on his deadline. After the discovery of the Pinto’s faulty gas tank, Ford’s president decided it would be costly to make changes in the Pinto’s gas tank location and its size. The Ford Pinto cost $2000 and making changes would increase its price thus possibly...
Words: 1203 - Pages: 5
...The Ford Pinto Case Back in the 1970s the Ford Pinto was debuted without regard to proper safety features and concern for proper ethics while producing this automobile. Buyers wanted lower pricing and bigger trunk space more than the consideration for safety. Lee Iacocca, president of Ford, ran the business striving for higher profits and cutting costs. His lack of interest for human life initiated many lawsuits against Ford and, in the end, was a far bigger cost than installing safety features in the Pinto in the beginning. The biggest concern regarding the role people played in the Ford Pinto case was the concern for cutting costs and making the biggest profits over the concern for human life. Severally jeopardized in this case were proper corporate morals and ethics. This started when Lee Iacocca acquired the position of president from the former President Semon Knudson. Lee Iacocca celebrated much success with the Mustang and wanted to market small cars to compete with the foreign car markets. Lee Iacocca drove to promote the Ford Pinto by 1971. Because it typically takes three and one-half years for the production of an automobile, to have the Ford Pinto to the showrooms by 1971, only left two years to launch the Ford Pinto. During the production process, crash tests revealed safety issues with the gas tank in the rear of the car. If the car were struck from behind even at a slow speed, the gas tank would rupture, and explode upon impact. Lee Iacocca’s decisions...
Words: 975 - Pages: 4
...The Ford Pinto Ethical Dilemma Written by Learning Team B; C. Riley, F. Foster, K. Jankoski, M. Riner, & R. Price Organizational Ethics and Social Responsibility 16 Aug 2010 Paul A. Kramer The Ford Pinto Ethical Dilemma In this presentation, a very important case that transpired from 1971 to 1978 with the Ford Motor Company, under the leadership of Mr. Lee Iacocca, CEO will be explored. During that time the CEO of Ford wanted to manufacture a vehicle to keep up with the competition that was going on with other manufactures. The Ford Company experienced many tragic issues with this vehicle having to pay millions of dollars in lawsuits. This was due to their negligence in not following the proper inspection procedures. It will be observed how this company was affected by the ethical and unethical issues regarding the Ford Pinto along with Ford and the Department of Transportation being the blame for every accident that transpired for not following the normal inspection procedures. A comparison of utilitarianism, deontological and virtue ethics in whistle blowing will be discussed to display how any business today can experience the negative or positive effects of such behavior. The risk taken stirred up a lot of talk nationwide regarding Ford’s action. The question of discussion will focus on whether or not Ford was actually the total blame for each incident that took place. First a possible solution will be looked at for the situation if one was to find themselves...
Words: 1456 - Pages: 6
...merits of a profit-driven economic system. They do not quarrel over the importance of profits. But they do quarrel over whether or not business firms have obligations beyond making profits. A consumer may be a pet owner who feeds and provides care for a beloved animal, a doting grandparent who buys toys and clothes for the grandkids, an individual who wears contact lenses or hearing aids, a patient who buys prescription medications, or vehicle owner. Should a consumer have certain expectations from the suppliers and producers of the products that he buys? Can we trust corporations that they will not produce what will jeopardize the human life? Was Ford to be blame in the pinto case? Must we wait for the characters like “Erin Brokovich” to fight on behalf of the helpless consumers? Who is to be blamed for the McDonald’s hot coffee case-the producer, the consumer or the regulators? Almost thirty years has passed since the Pinto accidents and what followed from it. We still don’t know how “safe” a...
Words: 4161 - Pages: 17
...The Ford Pinto Case Team B Management 216 May 10, 2011 Ian Finley The Ford Pinto Case The horrific tragedy that took place on August 10, 1978 involving Judy Ann Ulrich, Lynn Marie, and Donna Ulrich was a real eye opener to a lot of consumers regarding the Ford Pinto. A van collided into the back of the young girl’s car causing the Pinto to collapse, the fuel tank to rupture, and the car to engulf into flames. Donna and Lynn Marie were trapped inside and suffered to death as a result of the combustion of the vehicle. Judy Ann was able to be extracted from the wreckage but passed away several hours later at a hospital. Two months prior to the casualty, Ford recalled all Pintos produced from 1971 to 1976 to repair their inadequate gas tanks. Ford only took the initiative for the recall after it was revealed that more than fifty people had died in Pinto-related collisions. With the introduction of the Ford Pinto, Ford’s desire for competition, led the company to overlook known construction flaws and their own moral code to endure higher profits. Lynne Marie and Donna Ulrich, along with Richard Grimshaw and the unidentified neighbor; how do you assign a value to a human life? According to the Ford Motor Representatives in the Ford Pinto Fires Case, it is quite simply done with a cost/benefits formula analysis. We’d like to believe that those lost are the only people that mattered, the people whom Ford Motor Company should have considered when they turned down a $137.5...
Words: 1068 - Pages: 5
...Ford Pinto: A Study of Ethics In the 1960s Ford Motor Company, under pressure from stakeholders and the pressures involved in competing with the foreign vehicle market set out to manufacture a vehicle that was smaller, lighter and less expensive than the competition’s product. This vehicle was designed and moved into production within 2 years, much quicker than the 3 ½ year company norm and is still the shortest vehicle production planning schedule in history. The result: The Ford Pinto. While the Pinto was in the design phase it was decided that the fuel tank would be placed under the rear fender instead of over the rear axel to allow for more trunk room in the car. This design however, was quite flawed. The Pinto being smaller than the other American made cars was not built using the same frame design; a design that was manufactured to prevent the fuel tank from exploding upon a rear impact collision. Upon testing a serious defect was found with the placement of the fuel tank. It was determined that if the Pinto was involved in a rear end collision the fuel tank may rupture and burst into flames causing serious injury or death to the passengers. Team A will be examining the ethical dilemmas involved in the case and the solutions that we would recommend today and the solutions that would have been ethically appropriate in 1971. Lee Iacocca was the president of Ford Motor Company in 1971 and was the directive authority behind the creation of the Ford Pinto. He wanted a...
Words: 1776 - Pages: 8
...identifying the relevant facts. In the Pinto Fires Case, I believe there are six large facts that are the most relevant to determining whether a recall is the appropriate course of action. The first fact is that Ford Motor Company discovered the issue before the Pinto was released. With many recalls, the issues are not discovered until after the products in question are released, but Ford knew about this major issue and released the car anyways. The second crucial fact builds off the previous one – Ford knew how to fix the issue. They had found three possible solutions through their testing, but did not implement any of them. The third relevant fact is that Ford had shortened their amount of preparation time to release it earlier. This was something that had never been done before, so the fact that they cut down the amount of time they were spending on preparing this car by over a year was a recipe for disaster. The fourth fact to consider is the fact that Ford Motor Company was within the legal standards at the time. While Federal Motor Vehicle Safety Standard 301 had been proposed, it had not been adopted, so Ford’s move was legal. Furthermore as the fifth fact, in the 1970s, consumers were not nearly as concerned with safety. In fact, Ford had previously added a relatively costly safety feature only to find that it added no appeal to the consumers. The final fact is the fact that the National Highway Traffic Safety Administration had as part of their regulations the...
Words: 1313 - Pages: 6
...Ford Pinto Case In the 1970’s the Ford Pinto was debuted. It was debuted without regards to safety features and concern for society. The biggest concern regarding the role the company played was the concern for cutting costs and the hunger for making the biggest profit exceeding other competitors. Proper corporate morals and principles laid out to be followed were severally jeopardized with the release of this new model. The lack of interest for human life initiated dozens of lawsuits against Ford Motor Company which in the end resulted in a far larger cost than it would have been installing a simple, low cost, safety feature to prevent the loss of lives to come. Ford was struggling to keep up with competitors and there solution was the Ford Pinto. From the beginning Lee Iacocca, CEO of ford, wanted this new model to be designed and produced fast. This is documented when they state “they only had 25 months rather than the usual 43 months for a new car line” (DeGeorge 298). After development and before the car is released to the market the car must go through a range of tests to make sure the vehicle meets motor safety guidelines. Ford did not follow protocol and released the Ford Pinto without testing. It wasn’t until after the car was released that Ford decided to test the vehicle. It was then they found that the rear-end impact failed in accordance to the standard safety procedures even though there was no National Highway Traffic Safety Administration rear-end impact standard...
Words: 817 - Pages: 4
...Case 10: Ford’s Pinto Fires: The Retrospective view of Ford’s Recall Coordinator Ford motor company, North America’s subcompact automobile company; design Pinto in 1971 in order to compete with fuel efficient Volkswagen and Japanese imports. Pinto’s major design flaw- a fuel tank prone to rupturing with moderate speed rear-end collisions- surfaced not too long after the Pinto’s entrance to the market. In April 1974, the Center for Auto Safety Administration (NHTSA) to recall Ford Pintos due to the fuel tank design defects. As a result of tests performed of NHTSA, as well as the extraordinary amount of publicity generated by the problem, Ford Motor Company agreed to recall Ford Pintos. Dennis A. Gioia was the field recall coordinator at Ford Motor Company as the Pinto fuel tank defect began unfolding. Gioia responsibilities include the operational coordination of all the current recall campaigns, tracking incoming information to identify developing problems, and reviewing field reports of alleged components failures that led to accidents. Business Ethics: In the Ford Pinto Case, what moral issues does the Pinto case raise? what is the dollar value of the human life.Business Ethics: In the Ford Pinto Case, what moralissues does the Pinto case raise? that a car that explodes when hit in the rear can be used to deliver mailBusiness Ethics: In theFord Pinto Case, what moral issues does the Pinto case raise?That businesses should not be putting a value on human life and disregard...
Words: 850 - Pages: 4
...Managing Product Safety: the Ford Pinto Summary: Around 1967 Ford Motor Company decided to design a small size car called the Ford Pinto. The automobile industry at the time (and still is) was highly competitive and very cyclical. In the late 1960's, America began to see the influences of foreign vehicles. Facts Around 1967 Ford Motor Company decided to design a small size car called the Ford Pinto. The automobile industry at the time (and still is) was highly competitive and very cyclical. In the late 1960's, America began to see the influences of foreign vehicles. Prior to that, cars were bigger and less fuel efficient, allowing the Japanese to gain substantial market share with the smaller, more economical vehicles, and the need to react to this pressure was even greater at Ford. Even though they held the number two spot in market share behind General Motors, they only held a 22.3% market share compared to General Motors at 46.4%, a very significant difference. There was strong competition for Ford in the American small-car market from Volkswagen and several Japanesecompanies in the 1960's. In order for Ford to stay competitive and fight off competition, they rushed its newest car the Ford Pinto into production in much less time than is usually required to develop a car. The regular time to producean automobile was 43 months; Ford took only 38 months. Before production, the engineers at Ford discovered a major flaw in the cars' design. In nearly all rear-end crash test...
Words: 2593 - Pages: 11
...years the Ford Motor Company sold cars in which it knew hundreds of people would needlessly burn to death.” Mark Dowie, Author of Pinto Madness (8) One of the biggest automotive news stories in the latter part of the 1970’s dealt with tales of exploding Ford Pintos and the considerable awards civil court juries were presenting to victims of accidents involving the cars. Ford produced the Pinto automobile from 1971 to 1980. Initially the car sold well, but a defect in the early models made Pintos prone to leaking fuel and catching on fire after relatively low-speed, rear-end collisions. The Pinto’s gas tank was located behind the rear axle. A rear-end collision of about 28 miles per hour or more would crush the car’s rear end, causing the tank to split and the filling pipe to break loose. It had been proven that spilled fuel and sparks from the crash caused fires that produced fatalities or serious burns. Was Ford aware of the potential problems in the framework of the Pinto? Was there an easy, inexpensive way to fix these problems? Was the Pinto fire controversy a lot of hype, or had Ford truly discounted human lives in order to save a few dollars? If Ford management really placed marketing considerations above safety, was that objective ethical and are members of management morally responsible for the preventable Pinto fire deaths? In the following paper, several sources will be used to enlighten the reader as to the controversy surrounding the Ford Pinto,...
Words: 1922 - Pages: 8
...Case Review #1: Ford Pinto 1.) FACTS • Ford was aware of gas tank defects on their Pinto model • Ford ignored the safety concerns, positing “safety doesn’t sell” (p. 66) • Ford based their decision off a cost-benefit analysis o Determined the “cost” of trunk alterations outweighed the “cost” of enhanced safety • There were over 40 incidents involving Pinto passengers dying or being severely maimed 2.) ETHICAL ISSUES • Is it morally right to sell a car with known, potentially fatal, defects? 3.) PARTIES • Ford Motor Company • Ford Management • Ford Design Team • Ford Quality Control • Ford Pinto Drivers 4.) CONSEQUENCES • Utilitarian Principle: Ford’s decision should have maximized the benefits and minimized the harm for consumers. • The standard implicit in their decision was that since it was only a minority being injured, and they would reap a significant profit (with a majority of consumers being unaffected) their decision was permissible. • Potential Consequences by party: o Ford Motor Company – potential public backlash/potential legal action/potential monetary penalties/potential loss of credibility with the public o Ford Management – potential loss of profits to rival manufacturers/potential jail time/potential loss of position/potential loss of credibility o Ford Design Team- potential job loss/potential compensation penalties/potential jail time o Ford Quality Control – potential loss of credibility/potential loss of jobs o Ford Pinto Drivers...
Words: 616 - Pages: 3
...Running head: FORD PINTO CASE STUDY PAPER Ford Pinto Case Study Paper Learning Team B University of Phoenix MGT /216 Organizational Ethics and Social Responsibility SB09BSB10 Leatricia Cash June 2, 2010 The ethical issues surrounding Ford Motors in regard to the company’s production and release of the Ford Pinto brought the integrity of the organization into question by internal and external shareholders in the 1970s (Engineering.com, n.d.). Understanding the various ethical dilemmas faced by personnel who helped with the design and build of the Pinto provides clarification as to why the organization’s reputation as a quality supplier of automobiles was put into question by consumers. Analyzing the Ford Pinto Case Study, the following information will contain an outside viewpoint in regard to the Ford Pinto case that will illustrate viewpoints on the issue based off personal perspective. A recommendation on dealing with the issues Ford Motors faced with the Pinto are provided to illustrate the ethical approach Ford could have used during the production phase and after the vehicle entered the consumer market. The recommendation will be backed by examples of external and internal social pressures that have influenced the decision to recall the Ford Pinto. In addition, the evaluation of this case during 1971 and in current day is illustrated in the readings to compare and contrast the situation based on the...
Words: 964 - Pages: 4
