...Case: The Ford Pinto 1.) In my judgment, I feel that the management of Ford Company should be held morally responsible for Mrs. Gray’s death and Richard Grimshaw’s injuries. This is because Ford Company put the Pinto on the market to be sold. In that case, the managers were aware of the risk factors if indeed these cars did sale. Certainly, I do feel the Ford Company as a whole, should be held legally liable for the death of Mrs. Gray and the injuries of Richard Grimshaw. I strongly believe this because in the case it states, “Although the normal preproduction testing and development of an automobile takes about forty-three months, Iacocca managed to bring the Pinto to the production stage in a little over two years”. This simply shows the Pinto was clearly not ready to be on the market. The internal memos even showed that Ford crashed-tested early models of the Pinto before the production. The Pinto was tested over forty times and each test unfortunately results in a ruptured fuel tank. Since the crash tests models did not succeed, I do not understand why the Pinto was placed on the market. The management was unwilling to pay the minimal expense to redesign the vehicles. In that case according to the cost benefit analysis, it is morally wrong of them because they found it out to be cheaper to pay the lawsuits off from the deaths rather than paying for the safety makeover of the cars. The management of Ford was indeed forgetting about the life of a human and worrying about...
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...During the Late 1960’s the Ford Motor Company was one of the leading auto manufactures in the United States. Ford was credited with revolutionizing the muscle car era of the 1950’s and 1960’s. During the mid 1960’s Lee Iacocca helped Ford establish itself in the late 1960’s with the introduction of the Ford Mustang. During this time foreign auto manufactures were gaining market share in the mid to compact car markets. This was largely due to customers seeking more fuel efficient cars because of soaring fuel prices. Ford saw an opportunity to regain a portion of this market with the introduction of the Ford Pinto. This would bring them into direct competition with the foreign manufactures. The idea was to produce a small car that was affordable for the customer, and had a relatively high profit margin. With the introduction of the Ford Pinto, 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. The People In May of 1968 then vice president of Ford Motor Company Lee Iacocca recommended the introduction of a subcompact car into the market. The Ford Pinto’s design and development period was the shortest in automotive history (Trevino, p. 115). Iacocca wanted the Ford Pinto in showrooms by 1971, the development and design process was accelerated from 43 months to 38 months. Ford assigned a team of engineers to work on nothing but the Pinto. This team was required...
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...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...
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...The biggest influence on the decision to implement the baffle comes from a human element that seems to be missing from Ford’s decision. Human life is priceless, but Ford did manage to place a number on it. The loss of life is enough external pressure to influence the recall of the Pinto and add a part that cost less than a trip to the movies. “One Ford engineer, when asked about the dangerous gas tank said, “Safety isn’t the issue; trunk space is” (De George, 2005, p. 116). The Ford Company did not operate with a concern for the people. Instead of placing the safety of consumers at the top of the list, Lee Iacocca placed profit and competition above all. “As Lee Iacocca was fond of saying, “Safety does not sell” (Newton & Ford, 2008, p. 297). Recalling the cars did not seem to be of any concern and losing money is not an option. The company was not short on resources. They had the information, the materials, and the know-how to produce a safe vehicle. The consumers deserve to have a product that is safe and affordable. Unfortunately, the powers at the top did not take into account what the consumer thinks. The risk/benefit analysis was a large part of the decision to avoid the recall. This would place a dollar amount on human life. It would cost the company more to fix the problem than to save a number of lives. “When someone dies as a result of a dangerous product, unsafe treatment or negligent corporate behavior, we can't measure how much the deceased person...
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...tires, gaskets, wires and many others-led to a crucial need for rubber supply. Being the richest man in America, Ford had a vision; it was building the largest rubber plantation in the world by the Amazon River. This would mean lower costs for materials. Henry Ford aimed to not only provide the components necessary for his company’s success, but to also construct an Americanized town (Fordlandia) full of “well trained”, diligent workers. In connection with preparing the land for farming, the plantations positively aided in the development of industrial agriculture. However, Ford’s misunderstanding of the native culture, along with Ford’s efforts to blend American and Brazilian culture, resulted in total failure. Henry Ford’s cultural slips caused numerous complications. He had a misguided assumption that the natives wanted amenities similar to those of the United States. Therefore, he tried to slowly inject the innate workplace with American values and standards. The workers were forced to live a lifestyle that was far from their original way of life. Since all the plantation cafeterias and restaurants only served American food, the natives involuntarily changed their diets. While hamburgers and hot dogs were (and still are) appealing to most Americans, the natives, and their stomachs, felt otherwise. They began to experience and complain a lot about stomach problems. Ford also initiated an American work schedule which took place during the hottest temperatures of the day, even though...
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...The Case of the Ford Pinto By James Abstract Product harm crisis can be defined as a sudden break in a product’s life cycle (Siomkos, G.J and Kurzbard. J. 1994). In 1971 the Ford Motor Company created a product harm crisis with the introduction of the Ford Pinto. The Ford Pinto is known to be one of the most dangerous vehicles ever produced in automotive history due to several serious design flaws. This paper will identify the factors that contributed to the product harm crisis, compare and contrast the findings of various studies on a product harm crisis and finally synthesis the research findings and provide a post mortem recommendation to the Ford Motor Company on how the Ford Pinto product crisis should have been handled. The Case of the Ford Pinto In 1968 the Ford Motor Company decided to market a vehicle that was small, inexpensive and would appeal to all car buyers. The Vice President of Ford Motor Company at the time was Lee Iacocca. Mr. Iacocca approved the plan for the Ford Pinto based on the parameters of the car weighing 2000 pounds and costing $2,000.00 dollars (Danley J. 2005). By placing these parameters on the car’s designers, they were limited from the beginning and ended up with a failed product. The key factors that contributed to the product crisis included the Ford Pinto being rushed to production in twenty five months, the timeframe to production causing designers and producers of the car to cut corners and finally...
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...operations united to form Ford Europe, to give a strong regional identification. Over the following two decades Ford Europe performed well and in the 1980’s, its profitability helped sustain losses being sustained in the US market. After this Ford Europe began to struggle from 1992-2000 where losses had accumulated to $2.6 milliard. (Donnelly& Morris, 2003) In 1992, Ford Europe had been "slaughtered" by recent wild currency fluctuations that had torpedoed consumer demand in key markets such as Britain, Spain and Italy. The strength of Germany's mark had made Ford's products, even more expensive in those countries. (New York Times, 1992) Furthermore, by the mid -1990s, the European car market was in a state of virtual saturation with an annual growth rate of only 2 percent. Matters were made worse by heavy competition from both the Japanese imports as well as from vehicles produced in Japanese transplant factories within Europe as they focused on niche and hybrid models. Ford’s own specific difficulties were deep rooted and could be traced back to poor model development, excess capacity, failure in recognizing new market segments and inefficient cost control. As such recovery was slow and it was not until the late 1990s that Ford was again able to reach and surpass the level it had first hit 10 years previously. (Donnelly& Morris, 2003) [pic] 2. FORD 2000 These triggers...
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...PEROLD On April 14, 2000, Ford Motor Co. announced a shareholder Value Enhancement Plan (VEP) to significantly recapitalize the firm’s ownership structure. Ford had accumulated $23 billion in cash reserves, close to the company’s largest ever cash position and significant relative to Ford’s $57 billion equity market capitalization. Under the VEP, Ford would return as much as $10 billion of this cash to shareholders. In exchange for each share currently held, the plan would give stockholders one new share plus the choice of receiving $20 either in cash or additional new Ford common shares. Ford also announced that it would distribute ownership of its Visteon Corp. parts unit to shareholders. Ford’s share price had performed poorly over the previous year (Exhibit 1), and the proposal drew a positive reaction from analysts who had been urging the company for months to distribute cash to stockholders. Some hailed the VEP as the boldest step yet by Ford Chairman William Clay Ford Jr. and Chief Executive Officer Jacques Nasser to convince investors that they were undervaluing the world’s No. 2 automaker. However, the plan raised a number of questions for investors. Why was Ford proposing this transaction instead of a traditional share repurchase or a cash dividend? How did the interests of the Ford family factor into this decision, and what did the transaction imply about the future involvement of the family in the company? Why was Ford distributing such a significant...
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...Ford Motor Company entered the business world on June 16, 1903, when Henry Ford and 11 business associates signed the company’s articles of incorporation. With $28,000 in cash, the pioneering industrialists gave birth to what was to become one of the world’s largest corporations. Few companies are as closely identified with the history and development of industry and society throughout the 20th century as Ford Motor Company (Ford Motor Company, 2007). What made Henry Ford the businessperson successful where others had failed or succeeded only on a much smaller scale? It was not just his vehicles, excellent as they were – it was his unique understanding of those vehicles’ potential role in society Before Ford, cars were luxury items, and most of his early competitors continued to view them that way, manufacturing and marketing their vehicles for the rich. Ford’s great stroke of genius was recognizing that with the right techniques, cars could be made more affordable for the public– and that the public would want them (Ford Motor Company, 2007). Ford’s belief in bringing the car to the common man ruled his business decisions. He was fiercely determined to improve manufacturing efficiencies so his company could produce more cars and charge less. Ford was also unique in recognizing that his business was about more than just cars: it was about transportation, mobility, changing lifestyles. He anticipated the ripple effect from mass production to create more jobs that let more people...
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...represents 40% of the total marks for this subject. Students are required to write a 2,000 word essay based on the case study. Case study Ford Motor Company is one of the greatest automobile manufacturers of all time. They started under Henry Ford in Detroit, Michigan. Ford had a skill for craftsmanship when he built an experimental car in 1896. It was a twin cylinder engine with potential of 20 mph. In 1899 he left his job in order to organize the Detroit Automobile Company. Ford's first production was in 1903, the Model A, with an under the floor engine selling for $850. In the first season it sold 1,708 cars. After World War II production slowed down until the entrance of the 1949 line. At this time power units were new along with the automatic transmission in 1950. Great automobiles were manufactured in the coming years. The sporty Ford Thunderbird was introduced with 5.1 litres and capabilities of 113 mph. In 1958 it became a convertible with five seats and a strengthened structure. Major restyling occurred in the late 1950's with such automobiles as the Falcon, a compact car, with the help of General Motors and Chrysler. BM001-4-0-OSE INDIVIDUAL ASSIGNMENT During the 1960's competition increased and Ford had to become innovative in order to remain one of the top manufacturers. They put their minds together to create the Ford Mustang in 1964, a compact semi GT with four seats, at a price of $2480. The automobile had a 4.7 litre V8 engine...
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...Ford Motor Company Lakeisha Riley Strayer University 1. Define and discuss Ford's business-level strategy. Ford attempts to pursue a cost-leadership strategy which allows them to gain competitive advantage over their competitors by reducing their economic cost. Ford has been trying for years to keep the price of their vehicles down compared to their competitors. However, due to the recession like many other automobile industries, the government had to step in. Alan Mulally also had to step in to give his view on how not to allow Ford to fail. Eventually, agreements between the union and Ford resulted in lower cost and debt trades for equity. Ford also plans to select certain suppliers, cut off others that are expensive and offer longer even bigger to those that remain. Ford wants to take operations "to a different and new level" to ensure quality production and cost reduction. According to The Washington Post (2005) “Ford's new parts plan affects about half of Ford's $70 billion annual production bill. Ford officials think a strategy of working more closely with suppliers will foster greater collaboration and lead to better quality.” 2. Explain how the company's value-chain activities can be better linked to create value for the company. Ford used to be a selfish company. For a long time they were dominant in the automobile industry but now things are different. They need new direction. Ford’s business plan to the government in 2008 stated that “Ford will...
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...Ford was not looked at positively 30 plus years ago when competing with other small car companies worldwide. [Ford decided set an important goal known as “the limits of2,000”. This meant the Ford Pinto would not cost more than $2,000 and will not weigh more 2,000 pounds] (Trevino & Nelson, 2007, pg. 116). Despite faulty test results, Ford went forward with introducing the Pinto to the public. The results were disastrous. The problem with the Pinto was that the tank was not properly protected and if a rear end crash were to happen at speeds as low as 20 miles per hour the design would cause the gas tank to rupture and a fire or explosion to ensue. [To upgrade each which would have made the Pinto safer, it would have cost Ford $11 each vehicle. The total cost to Ford would have been $137 Million] (Trevino & Nelson, 2007, pg.117). Internal memos sent to upper managers stated that upgrades and modifications would not be made and the Pinto would be sold as originally manufactured. The decision was based on lawsuits which people had already died or were severely injured from the explosions. The lawsuits would be less costly to Ford instead of upgrading or manufacturing the vehicle. This is not only profit ahead of people, but negligence on Ford's part. In many cases, Ford was not even held accountable for the accidents. Most consumers at that time refused to believe that a large company like Ford would be at fault. Pg. 116 &...
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...Ford Motor Company – Case Study Jason Austin Denine Rood Jeanne Sands Like apple pie and a summer baseball game, Ford Motor Company has come to symbolize America, the land of opportunity. This America is a place where a person with scarcely any means can take little more than an idea and transform it into one of the most successful companies in the world. This is the story of Henry Ford and the Ford Motor Company. Consider the following quote from the Ford Web site. Ford Motor Company entered the business world on June 16, 1903, when Henry Ford and 11 business associates signed the company's articles of incorporation. With $28,000 in cash, the pioneering industrialists gave birth to what was to become one of the world's largest corporations. Few companies are as closely identified with the history and development of industry and society throughout the 20th century as Ford Motor Company. Henry Ford and his business partners where true entrepreneurs. Today, when we think about Ford, we think about innovation. From Henry Ford’s revolutionary idea of the assembly line to the new vehicles that Ford introduces every day, innovation has always been a cornerstone of Ford’s business. One little known fact is that Ford embraced QFD (Quality Function Deployment) , a Japanese quality methodology, into their product design process significantly earlier than most companies in the United States. This embracing of new ideology has led Ford to offer products...
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...Case 10: Ford: Supply Chain Strategy I. Introduction/Background Ford Motor Company is widely regarded as one of America’s premier automotive manufacturers and the second largest industrial corporation in the world, with operations in over 200 countries. Ford was established by Henry Ford in 1903, and is still standing strong today. Although Ford has significant revenues from its financial services, its core business is the design and manufacturing of motor vehicles. Due to overcapacity within the automobile industry, Ford developed a restructuring plan called Ford 2000 that focused on globalizing corporate organizations and taking advantage of economies of scale. Ford 2000 completely re-engineered several of Ford’s key processes including the Ford Production System (FPS) and Order to Delivery (OTD). FPS was created to convert Ford’s supply chain from a push strategy to a pull strategy. To increase supply chain efficiency, Ford aimed at reducing the number of suppliers that had accumulated over the years. Ford accomplished this by developing a closer, long term relationship with fewer suppliers referred to as “Tier 1” suppliers. These suppliers would provide complete vehicle subsystems for Ford. Tier 1 suppliers work closely with several Tier 2 suppliers who provide the components for the Tier 1 subsystems. Another initiative taken by Ford to improve their supply chain was the Ford Retail Network. This helped reduce competition among its dealership in the same region...
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...Conclusion………………………………………………………………………………….12-13 EXECUTIVE SUMMARY Ford Motor Company is the second largest industrial automotive corporation in the world. Their operations span over 200 countries with more than $144 billion in revenues. Over the years, its market share has been on the decline due to the entrance of foreign-based auto manufacturers. They are also faced with over industry capacity and uses minimal technology in their process. In an effort to face competition, Ford is currently reviewing Dell’s Model of virtual integration to solve their supply chain bottlenecks. However, there were fundamental issues that needed to be addressed: (1) How would the virtual integration affect the operations of Ford in areas of ordering, quality control and distribution? (2) Should Ford completely Dell’s business model or which aspects would work best for Ford? (3) Could Dell’s cycle time and lead times be replicated into Ford’s automotive infrastructure and would the current technology at Ford support this? and (4) Would virtual integration be feasible in the automotive industry given the product characteristics and industry scope? It was found that emerging technologies, globalization of foreign-based auto manufacturers and intense industry competition caused Ford’s issues. Subsequently, there were two ways Ford could handle this: adopting the whole Dell’s business model or adapting aspects of the business model. It was recommended that Ford should adapt aspects of the...
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