The Ford Pinto Case Study

The Ford Pinto Case

Review of the Case

The Pinto is a car that was manufactured by Ford from 1971-1980. The Pinto was Ford's answer to match the increasing popularity of smaller cars, also known as subcompact cars, which were being imported by Toyota and Datsun. Iacocca's specifications for the design of the car were very specific. "The Pinto was not to weigh an ounce over 2,000 pounds and not cost a cent over $2,000 (Unlisted, 2006)."

It was discovered in rear end crash tests, even before the car was sold to the public, that the fuel tank would rupture and begin spilling fuel in collisions over 25 mph and that collisions of over 40 mph would result in the front doors jamming making it almost impossible to get the passengers out of the car. If the fuel ignited, this created a fireball situation that severely injured and killed several people.

Because Ford was aware of this problem, and made aware of possible fixes, they did a cost study to compare the costs of potential law suits and the costs of changing the design for the Pinto. Based on this analysis, Ford legally chose not to make the design changes which would have made the Pinto safer. This decision led to one of the greatest debates of all time, leading towards arguments over just because a decision is legal, does it make it ethical, especially when the cost is a human life.

Facts and Assumptions

Facts

* The normal time span from conception to production of a new car model is about 43 months. The Pinto schedule was set at just under 25 (Unlisted, 2006).

* Design, styling, product planning, advance engineering, and quality assurance all have flexible times, but tooling doesn't. It usually takes 18 months. Because of the tooling's fixed time frame and Iacocca's required short time frame, tooling went on at the same time as production development (Birsch & Fielder, 19).

* Ford engineers discovered in pre-production crash tests that rear-end collisions would rupture the Pinto's fuel system at speeds above 25mph.

* Ford crash-tested the Pinto at a top secret site more than 40 times and every test made at over 25 mph without special structural alteration of the car has resulted in a ruptured fuel tank. Only 3 cars passed the test with unbroken fuel tanks. One was due to a plastic piece that cost $1 and weighed about 1 pound that was placed between the front of the gas tank and the differential housing. The second was when a piece of steel was placed between the tank and the bumper. The third was when the gas tank was lined with a rubber bladder. Ford officials denied under oath that they crash tested the Pinto (Birsch & Fielder, 16).

* Because assembly-line machinery was already tooled when engineers found this defect, top Ford officials decided to manufacture the car anyways, exploding gas tank and all, even though Ford owned the patent on a much safer gas tank (Dowie, 1).

* For more than eight years afterwards, Ford successfully lobbied against a key government safety standard, Standard 301, which would have forced the company to change the Pinto's fire-prone gas tank (Birsch & Fielder, 16).

* Ford waited 8 years to recall the Pinto because its internal cost-benefit analysis, which places a dollar value on human life, said it wasn't profitable to make the changes sooner (Birsch & Fielder, 16).

Assumptions

* Ford estimated the cost to make a production adjustment that would have made the Pinto safer at $11 per car.

* On the other side of the $11 per car estimate is the argument that there was a cheaper per car estimate of $5.08. The cheaper method involves placing a heavy rubber bladder inside the gas tank to keep the fuel from spilling if the tank ruptures. Goodyear had developed the bladder and had demonstrated it to the automotive industry (Dowie, 2).

* The public costs for the fire department to show up for the car fires were never figured into the cost-benefit analysis.

* If Ford hadn't rallied so hard against Standard 301, an estimated 40% of lives lost in fuel fed fires might have been saved by compliance with Standard 301.

Philosophical Questions

Given the design and cost limitations and the instructions passed down by Iacocca, is it fair to hold the engineers ethically responsible for the preventable Pinto fire injuries and deaths? How important is ethics in management decision making? Is it ethical for a company to perform cost-benefit analysis when human lives are involved?

Ethics is the study of moral characteristics and involves the moral choices made by individuals. It deals with values relating to human conduct that has to do with right and wrong actions and the integrity and intentions of such actions. Using that information, it would not be fair to hold the Pinto engineers ethically responsible for the Pinto fires and deaths that they did not design to happen intentionally. Although they are responsible for their behaviors and actions after they were aware of the situation. While you can't blame the engineers for Ford's final decision to go ahead and manufacture the car as is, it is fair to point blame at them if they did not do everything in their power to make sure that management and upper management were aware of the situation. I believe that because of the professional position that engineers are in, they are required to make ethical decisions. Engineering improves and enriches human life, but it can also endanger it. Therefore each engineer has a responsibility in his/her position to act morally. In this case, management was made aware of the design flaw and it was their decision to go ahead with the project, making it unfair to hold the engineers morally responsible for the injuries and deaths.

Customer relationships are of the utmost importance for a business to achieve long term profits. In order to achieve customer returns and a long-term relationship with customers, the business needs to be based on ethics, making ethics a very important role in management decisions. The trustworthiness of a business, its customer service, its customer care, its way of dealing with customers and its urge to retain their old customers, is a part of the business ethics. Business ethics leave a long-lasting impression on the customers and the impression on their minds builds trust, fetching a business more customers while retaining the older ones (Oak). The concept of ethics in business goes far beyond just the legality of how a business makes