Ford Pinto Caused Fiery Emotions and Endings, Who’s to Blame and What’s the Fix?
Ford Motor Company was caught up in a clear ethical dilemma in the case of the Ford Pinto fires in the 70’s. The dilemma was, is the cost of making the Pinto safer more important than the result of saving lives by making a design fix? Although the dilemma appears on the surface to be a no brainer there is much more that goes into this than what the
Dowie, M. (1977, September/October). Pinto Madness article alludes to and is clearly stated in Schwartz, G. (1990). The Myth of the Ford Pinto Case article that shows that some of the facts are not correct and that emotion may have driven the case to its magnitude. However this disparity between the two articles further proves the dilemma is difficult and there are many ways to approach a solution.
The History of this case started out with Ford Motor Company trying to beat out its competition in the sub-compact car market. Lee Iacocca in 1968 ordered the engineers and workers at Ford to produce a car that weighed less than 2,000 pounds and it had to cost less than $2000 dollars. Although this was stated to be a part of the issue, it really wasn’t considering that Ford was already creating a model in Europe that met those standards at the time called the Ford Escort. The issue was Lee Iacocca ordered his team to an unprecedented 25 month conception to production timeline. The hasty timeline created a major issue in that even though many of the necessary steps that had to be done to meet the time line could be done simultaneously, they would necessarily make since. The result was Ford had created its very expensive machinery to make the Pinto before they had completed all of the necessary design modifications. Ford found out in testing that the Pinto suffered from poor rear impact ratings, and during these rear impacts there was an issue with possible fires. Because of the time line employees where afraid to speak up about the problem, but eventually a cost analysis was conducted.
This cost analysis would later be a subject of much scrutiny. As laid out in Schwartz, G. (1990). The Myth of the Ford Pinto Case article cost analysis put a value on a lost life ($200,000 x 180 deaths) and on a burned surviver ($67,000 x 180 burn injuries) based on the industry overseer the National Highway Traffic Safety Administration (NHTSA) which actually came up with those numbers for an unrelated issue about trucks. Ford then took the number of occurrences where people where dying or burnt but still living, and figured out what the cost would be versus the cost to fix further issues ($11 a Pinto x 12.5 million Pintos = r) and based on their analysis (49.5 million dollars in safety benefits vs. 137 million dollars in cost of repair) they did not feel it was worth the change. This again is still an unjust number because the 12.5 million vehicles, and 180 deaths referred to all deaths not just in Pintos but in all cars and light trucks sold by manufacturers in America in a typical year. So in actuality Ford was being generous when comparing the two figures. Something to note is that in 1973 NHTSA made a new standard on gas tanks that would have prevented this issue but it did not go into effect until 1977 which is when Ford complied with these standards. In 1978 after the NHTSA finally found the Pinto’s gas tank from 1971-1976 was the issue behind the failures, Ford started a voluntary recall to fix the prior issue.
During the Pintos lifespan multiple lawsuits where brought up against Ford and won due to what the courts considered neglect by not fixing a problem that they knew about. Some interesting facts found in Schwartz, G. (1990). The Myth of the Ford Pinto Case article is that in 1975 and 1976 the Ford Pinto’s overall fatality rate was 634 which ranked them not 1st, not 2nd, but 3rd worst among the top 7 competitors in the market. If the Pinto would have had just 15 less fatalities over those two years they would have actually been only 5th worst in the same category. Keep in mind that the NHTSA evaluation said that only one percent of all traffic crashes result in fires; only four percent of all occupant fatalities occur in fire crashes; only 15% of all fatal fire crashes result from rear end collisions. This math debunks some of the claims posted in the Pulitzer Prize winning article Dowie, M. (1977, September/October) Article.
An in depth review of the history shows that there was much more at stake than the basic question on the service. Ford Motor Company had to make hard decisions and it is the type that many companies make every day. At what point is profit more important than the company’s corporate social responsibility(CSR)? What is the value on a human life and is driving in itself a danger that can’t be taken away? Did a demanding Lee Iaccoca put too much pressure on his employees who were intern afraid to speak up and stop the problem before it existed and at the worst help him rethink the situation after it already became a problem?
After conducting a situational analysis it became quite apparent that there are many things that contributed to the Pinto case. Clearly Lee Iaccoca was going to have his goals met and did not care about anything but the end result. Lee Iaccoa new that if he did not beat out the other sub-compact car competitors Ford would loose out on a huge market opportunity. He gave his managers and engineers no wiggle room and expressed his goals would be met. This led to a huge cost problem involving safety and an issue where people could not speak up and try to fix what was wrong. Mr. Iaccoa also new that the subcompact car market was very competitive on price and every dollar added to the price of the Pinto would hurt their chances for sales. Ford knew that the public would view their CSR as lacking but didn’t really find it worth improving until 1977 when they complied with the new NHTSA standards and in 1978 with the voluntary recall. Ford might have made that call based on both the cost analysis and what appeared to be a motor industry problem not just a Ford problem, in other words it was par for the course at the time.
Stake Holder Analysis
The stake holders involved range the gamut of people and sometime are not represented. The most obvious stake holder is the stock holders, they are typically looking for profit and if Ford would have redesigned and fixed the issue they knew that it would cost them over a years worth of profits. Lee Iaccoa was also a major stake holder, he just came off the big success of the Mustang and he wanted to prove that he was capable of more, which he later went on to save Chrysler during their hard times. Then there is the stakeholders we don’t always bring up, the consumer. The consumer in this case would probably sit on both sides of the fence. On one hand the consumer does not want to absorb the cost which was pretty apparent by the huge number of Pinto’s sold even when the reports about it’s safety had been known. On the other hand some people would have gladly absorbed the minor costs to avoid a tragic and possibly fiery demise. Lastly, the Press who got to write stories about how evil the corporations are and how they had no real care for life. This of course makes for a good story boosting their ratings and maybe even getting you a Pulitzer Prize.
Analysis Based On Ethical Theories
In this situation Ford used a teleology approach to justify to the industry and to the consumer that deaths would occur just merely based on the fact that people are driving which is inherently dangerous. This approach make the stockholders more accepting to the fact that their pockets would feel the benefits of Fords decisions and would justify the deaths. This also played into Mr. Iaccoa’s decision making because he had to justify his success at any cost mentality. The consumer and the press, for the most part, would have expected Ford to act in a more deontological way by putting what is morally right in front of what is was economically right. In general then and even now it seems to me that society tends to accept and understand the benefits that come along with a company taking a teleologist approach until things hit close to home and then quickly ask why the moral correct thing was not done.
Conclusions And Recommendations
In my opinion the Ford Motor Company started off on the wrong foot by pushing the deadline to an unreasonable amount of time kicking off the whole chain of events. This could have been avoided by having a more open door policy with its engineers and its employees. A solution to this would be to implement a round table atmosphere where managers have a chance to help in the decision making process. Next, I would implement a whistle blower policy allowing employees to voice their opinion when something is wrong. Once, Ford got to this point I am very torn on their actions to continue to follow the plan. One part of me understands that they did follow the law at the time and that the numbers where clearly skewed against them. But the other part of me can’t help but picture families burned alive and not feel like it is mandatory to take action. Ultimately, we have to own up to our mistakes and if an 11 dollar fix would have kept people alive I think it would have been the right choice and probably in the long term saved Ford money due to the bad press, inevitable recall, lawyer fees, and settlements.