...Managing Product Safety: the Ford Pinto Summary: Around 1967 Ford Motor Company decided to design a small size car called the Ford Pinto. The automobile industry at the time (and still is) was highly competitive and very cyclical. In the late 1960's, America began to see the influences of foreign vehicles. Facts Around 1967 Ford Motor Company decided to design a small size car called the Ford Pinto. The automobile industry at the time (and still is) was highly competitive and very cyclical. In the late 1960's, America began to see the influences of foreign vehicles. Prior to that, cars were bigger and less fuel efficient, allowing the Japanese to gain substantial market share with the smaller, more economical vehicles, and the need to react to this pressure was even greater at Ford. Even though they held the number two spot in market share behind General Motors, they only held a 22.3% market share compared to General Motors at 46.4%, a very significant difference. There was strong competition for Ford in the American small-car market from Volkswagen and several Japanesecompanies in the 1960's. In order for Ford to stay competitive and fight off competition, they rushed its newest car the Ford Pinto into production in much less time than is usually required to develop a car. The regular time to producean automobile was 43 months; Ford took only 38 months. Before production, the engineers at Ford discovered a major flaw in the cars' design. In nearly all rear-end crash test...
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...Running head: FORD PINTO CASE STUDY PAPER Ford Pinto Case Study Paper Learning Team B University of Phoenix MGT /216 Organizational Ethics and Social Responsibility SB09BSB10 Leatricia Cash June 2, 2010 The ethical issues surrounding Ford Motors in regard to the company’s production and release of the Ford Pinto brought the integrity of the organization into question by internal and external shareholders in the 1970s (Engineering.com, n.d.). Understanding the various ethical dilemmas faced by personnel who helped with the design and build of the Pinto provides clarification as to why the organization’s reputation as a quality supplier of automobiles was put into question by consumers. Analyzing the Ford Pinto Case Study, the following information will contain an outside viewpoint in regard to the Ford Pinto case that will illustrate viewpoints on the issue based off personal perspective. A recommendation on dealing with the issues Ford Motors faced with the Pinto are provided to illustrate the ethical approach Ford could have used during the production phase and after the vehicle entered the consumer market. The recommendation will be backed by examples of external and internal social pressures that have influenced the decision to recall the Ford Pinto. In addition, the evaluation of this case during 1971 and in current day is illustrated in the readings to compare and contrast the situation based on the...
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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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...Pagaduan MBA-1 Business Ethics Case Study: The Ford Pinto 1. What moral issues does the Pinto case raise? Answer: The Pinto case raise moral issues in human rights because even there were various ways of making the Pinto’s tank safer they refused technical improvement to prevent gas tanks from leaking. Given that number of people killed by fires from car, how they can value those individuals’ lives? Ford officials decide not to push the modification of the cars because it will be costly for them and not considering human’s life. 2. Supposed 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. Answer: With the use of risk/benefit analysis required by NHTSA, Ford officials justified in its decision not to change the Pinto model to increase vehicle safety, not considering the balance outlook on company’s perspective and human safeness. The moral principles that should invoke Ford officials is the act utilitarianism because this approach evaluates each action separately and the consequences that arise including any harms and benefits incurred by any people involved in the case. 3. Utilitarians 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 consideration to the interests...
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...In 1968, the Ford Motor Company, based upon a recommendation by then vice president Lee Iacocca, decided to launch a subcompact car which is 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...
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...THE FORD PINTO CASE The scandal and the trial On August 10, 1978, a tragic automobile accident occurred on U.S. Highway 33 near Goshen, Indiana. Sisters Judy and Lynn Ulrich (ages 18 and 16, respectively) and their cousin Donna Ulrich (age 18) were struck from the rear in their 1973 Ford Pinto by a van. The gas tank of the Pinto ruprured, the car burst into flames and the three teenagers were burned to death. Subsequently an Elkhart County grand jury returned a criminal homicide charge against Ford, the first ever against an American corporation. During the following 20-week trial, Judge Harold R. Staffeld advised the jury that Ford should be convicted of reckless homicide if it were shown that the company had engaged in “plain, conscious and unjustifiable disregard of harm that might result (from its actions) and the disregard involves a substantial deviation from acceptable standards of conduct”. The key phrase around which the trial hinged, of course, is “acceptable standards”. Did Ford knowingly and recklessly choose profit over safety in the design and placement of the Pinto's gas tank? Elkhart County prosecutor Michael A. Cosentino and chief Ford attorney James F. Neal battled dramatically over this issue in a rural Indiana courthouse. Meanwhile, American business anxiously awaited the verdict which could send warning ripples through board rooms across the nation concerning corporate responsibility and product liability. The Pinto controversy In 1977 the...
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...Responsible Commerce (COMM 101) Case 2.3 (The Ford Pinto) Week 4 1. What moral issues does the Pinto case raise? Moral issues that Ford Pinto case raises included producing dangerous products which are not safe to use it without informing the dangerous of the products to the public. In addition, lobbying the NHTSA to delay the safety measure of the products is also one of the moral issues that Ford Pinto case raises. (53 words) 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. The theory of egoism is most suitable to describe the Ford Pinto case. Ford is doing things that benefit the organization itself. In addition, Ford only considered the short term benefits and neglected the long term interests of the organization itself. The handling of the Pinto from the perspective of each of the moral theories is as following. Act utilitarianism says that Ford did not produce the greatest possible balance of cost-benefit calculation for everyone affected. According to the Kant’s categorical imperatives, Ford should not place a monetary value on a human life. Based on W.D.Ross’s 7 basic Prima Facie Duties, Ford failed to apply the duties of nonmalefience because they did not produce safe cars. Lastly, Ford is unethical when applying the ethic of caring. Ford not only produced dangerous...
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...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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...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 consideration...
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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...
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...Case Analysis: Pinto Fires Introduction Greed is the root to evil or at least the motivation behind some corporations making a good, ethical decision. The Ford Motor Company fell into a trap of greed that would cost many human lives. Before the disaster of the Pinto Fires, Ford had a reputation as being the safety pioneer in the automobile industry with additions such as the seat belts. However, as the invention of small cars began to take emerge Ford began to loose market shares to the foreign market. Ford had to do something and quick. Foreign markets were beginning to show promise with the vehicles that were going to put out on the market. The Ford Motor Company began to feel the pressure and felt that it needed to be in the limelight of the competition. Lee Iococca, the CEO of Ford, decided that it was time for a change and thus the Ford Pinto was introduced. However, the Pinto had numerous flaws that cost the Ford Company more than ever anticipated. Relevant facts During the 1960's the demand for sub-compact cars was rising on the market. Ford Motor Company, in competition with the foreign market, decided to introduce the Ford Pinto. The Ford Pinto was going to be the new wave for the Ford Company, but it was soon discovered that numerous problems existed. For example, the time that it took to manufacture an automobile was down from three and a half years to just over two years. Before production, however, the engineers at Ford discovered a major flaw in the cars...
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...Running Head: CASE STUDY Case Study Team MGT/216 09/13/10 Teacher Abstract Take a step back into the past, 1971 to be exact, imagine being a proud new owner of a popular and affordable vehicle, the Pinto. The vehicle is perfect for the tight budgeted and built by a trusted company (Ford). Then the unexpected happens, it is in a rear end accident. Upon the accident the car explodes. Sounds like a bad dream, right! (See video link in PowerPoint presentation) The following discusses a similar story that will from here forward be in reference as the Pinto Case, in which Ford was accused of being at fault for selling a shoddy car to the public. Were they at fault? What was the ethical dilemma? What were the social pressures? All of this and more is here within in detail. Pinto Case Study When Ford Motor Company had to determine what action to take in regards to the pinto many considerations were made. The company had to decide whether to install a baffle on the Ford Pinto to prevent the possibility of a puncture in the gas tank by a bolt from the bumper. The issue was found during a test done after the car was in production and on sale in the U.S. The gas tank is in the back of the car. During a rear-end test it was found that if a car travels more than 20 miles per hour and is hit from behind it is possible that a bolt from the bumper can puncture the gas tank. This can cause an explosion. Ford had the choice...
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...for Pinto Case In the automobile industry, the Pinto case is a reminder of how business decisions can cause people to act unethical when money and social pressures arise. The Ford Motor Company (Ford) sought to compete with foreign car manufacturers and expedite the production of vehicles even if it meant disregarding red flag signals. Your gut can still be useful in alerting you that something might be wrong—that you’re facing an ethical dilemma—in the first place (Trevino & Nelson, 2007). The Pinto case questions the behavior of employees who acted unethical even when presented with safety issues that would change the lives of consumers. The following summary will provide details about the Pinto case. Key factors surrounding the Ford Pinto case A key factor surrounding the Ford Pinto case was cost and safety. Ford was aware that the Pinto exploded when rear-ended. Dennis Gioia brought his concern to the committee. Because of the lack of evidence, the committee voted not to recall. Even after evidence was found, the committee again decided not to recall because in the word of Lee Iacocca “safety didn’t sell.” Ford became the topic of corporate social responsibility, unethical behavior and decision-making. At a time when fuel prices were on the rise, Ford decided to compete with foreign manufacturers by producing fuel efficient compact cars. The firm pushed to produce vehicles by breaking its ethical code and manufacturing cars that carried a safety hazard. Ford also...
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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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...The ethical justification of a decision using utilitarian analysis allows the person making the decision a resolution to the question of what action taken is best for the most people involved in the decision. Utilitarianism holds that, in the final analysis, only one action is right and that action is such that it’s benefits outweigh all other alternatives for people affected by the action. James Rachel states “This principle requires that whenever we have a choice between alternative actions or social policies, we must choose the one that has the best overall consequences for everyone concerned.” It is easy to call an act unethical based on first sight, but utilitarianism forces a calculation to look deeper and to identify the best consequences of the act. This is uncomfortable in society due to the selfishness of the individual citizen. One may not be happy if they are of the few who are receiving the negative side of a decision which impacts everyone else for the greatest good and for the most people possible. From this philosophical standpoint, cost benefit analysis would be a natural outcome. The Ford Pinto case is based upon act utilitarianism’s approach to making a decision using a cost benefit analysis and whether that action makes the best ethical outcome for all involved. In 1968, Ford Motor Company had a decision to make as to whether it would compete in the subcompact automotive market. Ford needed to quickly introduce a small, fuel efficient, and cheap car on the...
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