...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...
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...THE PINTO CASE A SHORT SUMMARY In the early 1960s Ford’s market position was being heavily eroded by competition from domestic and foreign manufactures of subcompacts. Lee Iacocca, then President of Ford, was determined to regain Ford’s share of the market by having a new subcompact, the Pinto, in production by 1970. Then Ford engineers crash tested an early model of the Pinto. They found that when the automobile was struck from the rear at 20 miles per hour, the gas tank regularly ruptured. Stray sparks could then ignite the spraying gasoline, engulf the car in flames and possibly burn the trapped occupants. Nonetheless, Ford management decided for several reasons to go ahead with production of the Pinto as designed. First, the design met all applicable federal laws and standards then in effect. Secondly, the Pinto was comparable in safety to other cars being produced by the auto industry. Third, an internal Ford study indicated that the social costs of improving the design outweighed the social benefits. According to the study it was estimated that a maximum of 180 deaths might result if the Pinto design were not changed. For purposes of cost/benefit analysis the Federal government at that time put a value of $200,000 on a human life. Consequently, the study reasoned, saving 180 lives was worth about a total of $36 million to society. On the other hand, improving the 11 million Pintos then being planned would cost about $11 per car for a total investment of $121 million. Since...
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...Case 2.2 (The Ford Pinto) 2.) Suppose Ford officials were asked to justify their decision. What moral principles do you think they would invoke? Assess Ford’s handling of the Pinto from the perspective of each of the moral theories discussed in the chapter. 3.) Utilitarian’s would say that jeopardizing motorist does not by itself make Ford’s action morally objectionable. The only morally relevant matter is whether Ford gave equal consideration to the interests of each affected party. Do you think Ford did this? 4.) Is cost-benefit analysis a legitimate tool? What role if any should it play in moral deliberation? Critically assess the example of cost-benefit analysis given in the case study. Is there anything unsatisfactory about it? Could it have been improved upon in some way? Cost-benefit analysis is clearly a legitimate tool for businesses to use in deciding what actions to take. As Friedman has argued, the role of business is to make money and a cost benefit analysis is a very useful tool in figuring out how to do so. When it comes to morals, however, cost-benefit analysis is much less useful unless one believes in utilitarianism. For most other understandings of morality, a person should not be asking "what do I gain and lose" when trying to figure out what to do. People should, instead, be asking "what's the right thing to do." Cost-benefit analysis can't really help with that. ...
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...Ford Pinto. In order to gain a large market share, the Ford Motor Company plans for the project was the 2000/2000 rule. The car’s designer was designed and developed Pinto could weigh no more than 2000 pounds and it could cost no more than 2000 dollar. The Product Planning Committee instituted this rule because of the extreme competition between all of the automotive companies at the time (Daniel Boyce, n.d). Due to the Ford Motor Company was implemented the 2000/2000 rule, the car’s designers had to cut corners and restricted their ability to design a car the way it should be designed. Therefore, the Ford Pinto is known to be one of the most dangerous cars produced in automotive history due to several serious design flaws. Daniel Boyce wrote an article titled “Ford Pinto Case Information”. In his article, he claimed that “Pinto’s problems originated with the placement of the gas tank. At that time of automobile production, it was customary to place the gas tank between the rear axle and the bumper, which would give the vehicle more trunk space. The only other place the gas tank would be mounted was above the rear axle, but that eliminated trunk space, and the developers of the Pinto wanted the most practical car they could produce. The gas tank was nine inches away from the rear axle. This might not seem like a big deal, but there were other parts of the Pinto that cause this to be deadly”. In addition, another small design flaw was the rear bumper attached to the Pinto. Usually...
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...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...
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...PINTO FIRES CASE The assumption that ‘it’s easy to be ethical’ assumes that individuals automatically know that they are facing an ethical dilemma and that they should simply choose to do the right thing. But decision makers may not always recognize that they are facing a moral issue. Rarely do decisions come with waving red flags. Dennis Gioia was recall coordinator at Ford Motor Company in the early 1970s when the company decided not to recall the Pinto despite dangerous fires that were killing the occupants of vehicles involved in low-impact rear-end collisions. In his information and overloaded recall coordinator role, Gioia saw thousands of accident reports, and he followed a cognitive “script” that helped him decide which situations represented strong recall candidates and which did not. The incoming information about the Pinto fires did not penetrate a script designed to surface other issues, and it did not initially raise ethical concerns. He and his colleagues in the recall office did not recognize the recall issue as an ethical issue. From the standpoint of Hooker’s test, we will start with the geralizability test. Hooker (2011) states that to pass generalizability, it must give the reasons for an action have to be consistent with the assumption that others who have the same reasons act the same way. To release the Pinto as scheduled and risk the safety of those who purchased it or spend more time designing the car, thereby seceding more of the subcompact...
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...As Pinto’s management had the opportunity to create a new design which would decrease the possibility of the Ford Pinto from exploding, the company’s decision not to move forward with its implementation could be considered appropriate. Ford justified this avoidance based on the accepted risk/benefit analysis to determine if the costs of making the change accommodated the social benefit. This risk/benefit analysis was created measuring the development of product liability, adopted by 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. While the application of the BPL formula only focuses on accidents of specific condition, the risk/benefit analysis determining variables include costs, risks, and benefits through use of the product as a whole. As Ford choosing not to make the design changes which would have made the Pinto safer was not a violation of any legal standards, it could be considered by some as unethical Outside of mentioning the risk/benefit analysis for Pinto’s management’s decision, there are a several other determining factors that validated Ford's decision not to upgrade the fuel system design. One was the effect of the change on car sales through the promotion of safety. It was reported that Ford had based a previous advertising campaign around safety which deemed ineffective, where the company realized this was not a primary factor in sales. Another...
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...“Ford Pinto Case” After watching this video about the Ford Pinto Case, I think their decision was no ethical, because of the cost-benefit analyses they applied, trying to determine if the flaw in Ford Pinto automobiles is worth the financial risk in comparison to the value in human life, which is unconscionable and indefensible. Ford estimated that each dead that could be avoided would be worth $200.000 and each major burn injury $67.000 and average for repair cost of $700 per car involved in an accident. Moreover, it assumed that there would be 2100 burned vehicles, 180 serious burn injuries and 180 burn deaths. And when they made some math, the cost was calculated to be $137 million, which are much greater than the $49.5 million benefit. Furthermore, Ford chose to pay for possible lawsuits instead of repairing the Ford Pinto. If Ford had the right business ethic and moral integrity to put consumer safety first, instead of profit and competition, then there would have been no loss of life or financial suffering. Sometimes, you have to believe that the end justify the means. And that happened to me, four months ago. I had to go to Cuba, for an emergency. And I had no money in that moment to pay for it, so I applied for a credit card, which, one of the point while applying, was to say what my annual income was, and I had to lie about it. Because, if you say it is less than 20.000, the credit card company will only give you a credit line of 2000, or less. Now, if you say that...
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...the relevant facts of the Ford Pinto case: In 1970 Ford introduced the Pinto, a small car that was intended to compete with the then current challenge from European cars and the ominous presence on the horizon of Japanese manufacturers. The Pinto was brought from inception to production in the record time of approximately 25 months, where a normal car usually takes 43 months. This showed an expedited time frame for the Pinto. On top of time pressure the team was also required to follow a limit of 2000, that meaning it could not exceed $2000 in cost and it could not weight more than 2000lbs. When it came to routine crash testing of the Pinto, it was revealed that the Pinto’s fuel tank often ruptured when struck from the rear at a relatively low speed. This was because the fuel tank was positioned between the rear bumper and the rear axle, and when impact was made studs from the axle would puncture the fuel tank, spilling gasoline that could be ignited by the sparks. In crash testing 11 vehicles, 8 of the cars suffered potentially catastrophic gas tank ruptures. There were several possibilities for fixing the problem, but given the restrictions of limit of 2000, they made no changes. The most controversial reason for rejecting the production change was because of Ford’s cost-benefit analysis. Ford believed that the cost of rebuilding the Pinto to make it safer were far more expensive than the cost of life for each fatality. Due to schema, the Pinto was found okay to sell on the...
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...Ground In 1970’s, Ford had been criticized by the public due to a defective fuel system design. Although Ford had access to a new design which would decrease the possibility of the Ford Pinto from exploring, the company chose not to redesign the system, which would have cost $11 per car, even though the analysis showed that the new system would result in 180 less deaths (1999, The Valuation of Life As It Applies To the Negligence-Efficiency Argument). The company defended itself by using the accepted risk/benefit analysis to indicate that costs of making the change were higher than the fatality costs. This analysis was based on Judge Learned Hand’s BPL formula, where if the expected harm exceeded the redesign costs, then Ford must make the change, whereas if the redesign costs were higher than fatality costs, then it didn’t have to. Ford legally chose not to make the fuel system changes which would have reduced the fatality rate. However, it was legal doesn’t mean that it was ethical to the society. It is hard to accept how companies can put price tag on a human life. To me, it is unethical to determine that people should die or be injured because it would cost too much money to prevent it. Some things just can’t be measured in price, and that includes human life. Christopher Leggett stated in his case analysis: “Ford adopted a policy of allowing a certain number of people to die or be seriously injured even though they would have avoided it. From a human rights perspective, Ford...
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...21 June 2013 The Ford Pinto Case The big question which needs an answer in this case is if Ford should have installed a device to prevent the Ford Pinto from exploding into a fiery ball upon impact for the safety of its occupants. Before an answer can be determined, let’s look at the facts of this case. “In the late 1960s, American automobiles were losing market share to smaller Japanese imports (DeGeorge 298).” Ford felt the need to compete to keep ahead domestically so it developed the subcompact care, the Ford Pinto. Lee Iacocca, the CEO at the time ordered Ford to produce a car for 1971 that weighed less than 2,000 pounds and priced at less than $2,000. The engineers of Ford came out with the Ford Pinto. It took 25 months to design and produce the Ford Pinto. The industry norm it should take is 43 months. Due to the shorter production period, Ford tested the Pinto for rear-impact safety after production. The Pinto failed the test with 37 out of 40 attempts. The crash test revealed a serious defect in the gas tank. The gas tank would rupture by four sharp bolts on the rear axle with an impact of over 25 mph spilling fuel on the ground. The engineers designed the Pinto so the gas tank would set behind the rear axle to allow for more trunk space. The Federal Motor Vehicle Safety Standard 301 required vehicles to withstand rear-end collisions of 28 mph. The three times the Pinto passed was in cars equipped with three different modifications to the fuel tank. Installing a plastic...
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...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...
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...1. What moral issues does the Pinto case raise? I think Pinto case raised some serious issue of abusing human rights and not behaving ethically in the world of business. Any business/service should never ever put a value on human life and not take consideration of a known deadly danger. Ford had an option as well as the solution to design the car in a way that prevented cars from exploding; however they refused to implement it. They thought that it was cost effective not to fix dangerous condition than to spend the money to save people in spite of the fact that the only added cost was $ 11 per vehicle. 2. Suppose Ford officials were asked to justify their decision. What moral principles do you think they would invoke? Assess Ford’s handling of the Pinto from the perspective of each of the moral theories discussed in this chapter. I think Ford officials would invoke the principles of utilitarianism. They claimed that they used cost benefit strictly based on data provided by National Highway Traffic Safety Administration (NHSTA). Moreover Ford also quantified a human life as a commodity at cost of approximately $ 200,000. As per their analysis, the $49.5 million benefits and $137.5 million cost suggested that Ford implementation of safety improvements would totally outweighed their benefits. 3. Utilitarian’s would say that jeopardizing motorists does not by itself make Ford’s action morally objectionable. The only morally relevant matter is whether Ford gave equal...
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...Appendix 2: Ford Pinto Case and Cost Benefit Analysis Edited by Richard Brooks In 1968 in response to strong foreign competition, Ford decided to build a subcompact car — the Pinto — on a 2×2×2 plan (2,000 pounds, $2,000, in 2 years). In pre-launch tests, Ford discovered that rear end collisions propelled the gas tank onto the real axle, which had protrusions that ruptured the tank and caused the car to catch fire. Yet Ford did Figure 1: Ford Pinto not modify the Pinto’s rear axle. Nor did it follow through on an idea to place a rubber bladder in the fuel tank. Why? The reason seems to have been that these changes would have increased the price, lowered sales and reduced profit. That reason is given credence in a cost/benefit study done on modifying the Pinto. So the Ford Pinto went on sale with dangerous design faults in the position of the fuel tank and nearby bolts, and the tendency for the fuel valve to leak in rollover accidents. Design and production was rushed and cost of the vehicle kept down to sell it at $2000. It sold well, until 1972 when four people died and one young boy was horrendously burned and disfigured; these are only a few of the incidents that resulted from the Pinto’s flaws, many more followed, costing Ford millions in compensation. The engineers were fully aware of the flaws, yet the company continued to sell the car as it was, without safety modifications. Ford applied a generic cost/benefit analysis to accidents based on National Highway Traffic...
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...FORD PINTO CASE The Ford management has chosen to be unethical and morally unworthy to be trusted with the lives of its customers. Can you just imagine the number of individuals riding every day in the cars that they produced, who are unaware that they could be in an injury any moment? Ford management has chosen not to follow the safety guidelines and standards in producing such products because at that time, the government is still not that strict in implementing such rules. And because of their eagerness to meet the production schedule, they have reduced the time allotted for the rear-end impact testing just to introduce such product on the market on time. They disregarded their customer’s safety and the possibility of injury or death just for the sake of small profit or share in the market. Ford with its utilitarian perspective, which the decision not to recall such products or even warn its customers, served the greater amount of good to those who are affected, hose who will benefit from the profit it will get. It has also regarded its decision as to having no instinctive value even when it is showing obvious consequences. The cost-benefit analysis that was used by Ford was also to blame. The cost amounting to $137M versus the $49.5M estimated for the cost of injuries, deaths, and car damages has been the deciding factor for Ford not to implement the design changes that would have made the cars safer. Ford used the formula so as not to legally implement the changes. However...
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