The Ford Pinto gas tank fire hazard and cost-benefit decision

Ford Pinto Ethics

When it comes to ethics, safety and car companies, more recent events like the protracted Toyota or General Motors recall issues or the Ford/Firestone fiasco probably come to mind for many people. However, those ethical and procedural dilemmas were both preceded by a much nastier and more lethal example of ethics and cars gone completely wrong and that was the Ford Pinto case. Ford Pintos were literally becoming incinerated when being struck from the rear due to the location and vulnerability of the gas tank and a number of people were burned to death as a result of these crashes. This brief case study will review what happened during this period of time for Ford, what could have been done differently and how the car world was changed forever after the Pinto problem became front-page news. While there obviously some calculating when it comes to recalls and such, absolutely anything that relates to public safety such as brakes, steering or anything that can be a fire hazard (e.g. gas lines/tanks) should be an automatic recall -- no questions asked.

Analysis

A confluence of three factors seemed to lead to the Ford Pinto gas tank mistake happening. First of all, Japanese cars of the day were very cheap and the quality of those cars was much the same ...cheap. At the same time, then Ford Motor Company president Lee Iacocca (later of Chrysler fame) asserted that the company needed to produce a car that weighed no more than two thousand pounds and cost no more than two thousand dollars. Lastly, the overall development window for the Ford Pinto was artificially compressed under pressure from Ford executives that wanted the Pinto on the market as soon as possible. The 1970 and 1971 model year Pintos were crash tested in terms of rear-impact at speeds of 20 and 30 miles per hour and they failed miserably. The crash tests that revealed this to be true came about the same time that a production timeline deadline was passing. They had the choice to either fix the design or they could just sell the car they had designed at that point. Inexplicably, they not only chose the latter but the flawed design was the same one that was sold to the public for more than half a decade, six years to be precise. Even worse, the extra cost per vehicle, for example, to protect against one of the worst kind of accidents would have only cost eleven dollars per vehicle ... barely one half of one percent of the cost of the vehicle. However, there was actually a cost/benefit analysis done comparing the "benefit" of fixing the vehicle and the cost of making the fixes. The total measured benefits came to $49.5 million and the costs came to $137.5 million. For that reason alone, Ford decided against making the fixes that ethics and decency would seem to require (Shaw, 2015).

However, that decision was a very deadly one. Indeed, even "conservative" estimates suggest that no less than five hundred people burned to death due to gas tank explosions with Pintos that were struck from the rear or otherwise had their gas tank integrity compromised through rollover crashes and other serious wrecks. There are several main facts that really boggle the mind. Indeed, Ford could have fixed the issues and dodged so much of the negative events that happened. However, they did not do so for some reason. Beyond the head-scratching facts mentioned above, there is also the fact that Ford owned the patent for a much safer tank already but yet did not use it. Even worse, Ford spent the better part of a decade lobbying against mandated changes to their gas tank even though they knew full well that the car was fire-prone when struck from the year or when involved in any sort of rollover accident. The five hundred death estimate mentioned above was just that ... an estimate. Some people peg the number at nine hundred, nearly double the more conservative estimates. Nearly one thousand deaths for a design flaw, a very dangerous design flaw, that was known in advance is almost literally unforgiveable and Ford is lucky to be in business right now given that fact alone (Dowie, 1977; Sherefkin, 2003).

As far as a stakeholder analysis, fixing the design flaws at the onset obviously would have cost Ford money. However, the fact that the "benefits" were supposedly less than the cost of fixing the flaw is rather twisted given that nearly a thousand people died as a direct or indirect result of that design flaw. Indeed, the customers are stakeholders too and Ford had a duty to fix the design flaw before the car was ever sold to the public. This holds true even if Ford itself lost money and the shareholders (also stakeholders) were to squawk about the costs of fixing the problem. The point is that while worrying about money spent and shareholder returns is important to a publicly traded company like Ford, making decisions like Ford did that obviously and unquestionably endanger the public are never acceptable and should not be allowed to happen ... regardless of the cost. Ultimately, Ford could have absorbed the cost or scrapped the car. However, those five to nine hundred dead people had their lives cut short over something that was entirely preventable. Even well-designed cars can have fatality accidents. This is not in question. However, cars should not be exploding and burning to rubble if they are rear-ended at less than twenty to thirty miles per hour and that is precisely what was happening with Pintos and Ford knew it in advance. When it comes to analysis based on ethical theories, it is clear that Ford was exercising a lot of cultural relativism. Indeed, they were calculating whether to do the fix to the gas tanks based on dollars and cents. In many to most cases, this may be acceptable. However, any product that can kill its user due to a design flaw should be fixed. Any morally sound person, even in the car industry, would blast as unethical or even soulless the idea of selling a car with such an unsafe design flaw that could easily and obviously kill people. To state the obvious, society viewed what Ford did very dimly as they were ostensibly more worried about saving money than saving lives. Further, Ford had a duty to do the right thing anyway irrespective of what the public did or did not know.