Case Study: Ford Pinto MGT/216 07/17/20 Case Study: Ford Pinto 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 had begun and the release of the Pinto in the United States, 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 due to a bolt puncturing the fuel tank.
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 prove 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 committed to providing personal mobility for people around the world. ” In 1978, three female teenagers died in automobile accident, the cause of this fatal accident was a rupture of the gas tank. As a result, the Ford Company was fined $30,000 for each conviction and millions of dollars in punitive damages to the families of the lost teens. The national Highway traffic safety administration broke down the average cost of an accident.
The purpose was to make changes in the fatal accident involving three teenage females. The result of this cost consist of the following: Loses of productivity, medical, property, insurance, legal, and loss of employment, pain a suffering, funeral arrangements, assets, and other miscellaneous. The total cost comes to $200,725. The Pinto was listed in the top 50 worst cars of all-time, due in part to the gas tank malfunction. Many companies deal with the cost versus benefits to the company analysis or what is commonly referred to as a risk benefits analysis.
This allows the company to weigh the good and bad of a product they are considering offering to the public, if the benefits are greater than the risk then the company goes ahead and puts their product on the market. In the case of the Ford Pinto, this was no different. According to Christopher Legget, (1999) “The risk/benefit approach excuses a defendant if the monetary costs of making a production change are greater than the societal benefit of that change” (The Ford Pinto Case: The evaluation of life as it applies to the negligence-efficiency argument).
Team Values versus Ford Values The Ford Company’s mission statement gives those who read it a view of their ideas and values. They value the lives of their employees and their customers. They are committed to putting forth an excellent product which people will be happy to purchase but also talk to their friends about. This coincides with the values of making sure the people, whether employee or consumer are safe and happy with the product. The Ford Pinto case was the first criminal prosecutable offense by an organization in history.
Humans deciding that other humans can die for profit. The decision made by Ford not to alter the fuel tank problem in the Pinto is evidence enough that morals and ethics were absent when making the decision to deal with any lawsuits that might have risen from accidents involving the Pinto. In today’s society, cost/analysis decisions are made every day, with the cost of litigation, liability, and reputation, a decision such as the pinto case can and almost certainly will crush any corporation.
The Ford Company adhered to the safety standard requirements at the time the Pinto was manufactured. However, the later findings of the troublesome bolt created a deadly risk that was swept under the carpet. Today the Ford Motor Company has concentrated efforts on vehicle safety; Ford vehicles have earned top safety picks by The Insurance Institute for Highway Safety with a total of 11 Top Safety Pick ratings for 2010 model vehicles. Ford is also leading the number of five-star ratings from the National Highway Traffic Safety Administration (Ford Motor Company, 2010).
Conclusion The public purchases vehicles for value, but safety in a vehicle appears to be less important with today’s economy, fuel consumptions outweighs safety. When a vehicles size and weight is reduced, safety could be sacrificed. The larger the vehicle the more space for safety features. Take the SMART CARS for example. They are practically a front seat with an engine. This leaves very little room for safety during a collision. At the time Ford manufactured the Pinto consumers expressed more concern in trunk space than in vehicle safety.
Upon review of information available regarding the stated current values and guiding principles Ford operates under, “One Ford, One Team, One Plan, One Goal philosophy (Ford Motor Company, 2010). One team of people working together as a lean, global enterprise for automotive leadership, as measured by: customer, employee, and dealer, investor, and supplier, union/council, and community satisfaction. One plan; aggressively restructure to operate profitably at the current demand and changing model mix. Accelerate development of new products our customers want and value. Finance our plan and improve our balance sheet.
Work together effectively as one team. One goal: An exciting viable Ford delivering profitable growth for all”. References Ford Motor Company (2010). Retrieved from http://www. fordmotorcompany. com Legget, Christopher. (1999). The Ford Pinto case: The evaluation of life as it applies to the negligence-efficiency argument. Retrieved from http://www. wfu. edu/~palmitar/Law&Valuation/Papers/1999/Leggett-pinto. html National Academies Press. (2010). Retrieved from http://www. nap. edu/openbook. php Trivino, L. Nelson, K. A. (2007) Managing Business Ethics, Straight talk about how to do it