Ford Pinto Case: Corporate Crime and Administrative Evil

Introduction

Experts on corporate crime such as David O. Friedrichs (1996) once lamented the lack of attention given to white-collar crime. This was due to the mistaken assumption that, unlike violent street crimes, white-collar crimes were victimless and therefore less harmful.

However, events such as the Firestone tire blowouts, the rollover of Ford vehicles, Enron's padding of profits, and Arthur Andersen's creative accounting practices have generated new interest in white-collar crime. The growing litigiousness of the American public and media coverage generated by product failures have likewise drawn more attention to what Rosoff, Pontell, and Tillman (2002) label "the other crime problem."

Friedrichs (1997) identifies three major types of white-collar crime: government crime, occupational crime, and corporate crime.

This paper focuses on the issue of corporate crime through a close examination of the Ford Pinto case, one of the landmark cases in corporate criminology. The first part examines the facts of the Ford Pinto case, from the decision to rush production of the unsafe car to the effects of the 1980 criminal trial of the Ford Motor Company for reckless homicide. The paper then uses the framework of white-collar crime research and studies on organizational culture and structure to examine the lack of safety and recall regulations that may have contributed to as many as 500 deaths (Dowie 1977).

This paper concludes that, in addition to the drive for profit, the institutional norms embedded in the organizational structure of the Ford Company — as well as within the NHTSA at the time — contributed significantly to the lack of both internal and external regulation. That absence of regulation, in turn, resulted in unsafe cars that cost many occupants their lives.

Review of Literature

Much of the literature on the Ford Pinto case focuses on how consumer safety was willingly sacrificed in the face of corporate greed. Dowie (1977) wrote the first and definitive account in his Pulitzer Prize-winning "Pinto Madness." In this exposé, Dowie unearthed documents proving that Ford's engineers and managers knew of the Pinto's safety problems for at least seven years but refused to make the necessary corrections. This decision, Dowie charged, was based on the concept of profit maximization.

Strobel (1980) follows suit with an examination of why the Pinto became "the most controversial car ever built" (169). In addition to the accidents, Strobel discusses the ensuing recall of the Pinto, the $125 million in punitive damages awarded to a Pinto burn victim, and the subsequent criminal trial over questions of product safety and company liability.

Kramer (1982) argues that Ford's decision to leave the unsafe and easily dislodged gas tank in the Pinto was deliberate, again made in light of management's need to maximize profit.

Many studies on white-collar crime point to the Ford Pinto case as the best-known example of the dangers of corporate greed. Simon and Eitzen (1990), for example, cite it as an instance of a company that, for almost a decade, knowingly marketed an unsafe product. Hagan (1994) goes even further, stating, "Choosing profit over human lives, the company continued to avoid and lobby even eight years later against federal safety standards that would have forced modification of the gas tank" (376).

While these accounts present compelling analyses of capitalist and corporate greed, they do not shed light on how a deliberate decision to market an unsafe product went unchallenged by regulation — either internal (within the Ford Company) or external (within the NHTSA and other relevant government authorities).

Towards this end, Cullen, Maakestad, and Cavender (1987) locate the Ford Pinto case within the larger field of white-collar crime and corporate criminal liability. The authors argue that part of the reason for the absence of regulations in the early 1970s was the lack of a social movement for consumer rights.

Going beyond the Ford Pinto case, it is also useful to examine other agencies or corporations that have experienced similar safety-related tragedies. Vaughn (1996) and Adams and Balfour (1998), for example, have conducted research on the factors that led to the Challenger tragedy at NASA. Vaughn concludes that the organizational and institutional processes at NASA contributed to failures in safety-related communication.

Adams and Balfour (1998) offer a more far-reaching analysis, locating the failure of safety within the concept of "administrative evil." Using the NASA case as one example, they argue that a culture's emphasis on technical progress can cause people to unwittingly act in ways that inflict pain and suffering on others.

Background of the Ford Pinto Case

The concept of administrative evil and the highly compartmentalized organizational structure present a useful framework for analyzing the failure of safety regulations in the Ford Pinto case. This paper argues that while corporate greed may have significantly contributed to the accelerated marketing of an unsafe car, the lack of communication between Ford's different divisions further compounded the problem. As a result, Ford managers and engineers became the unwitting instruments of administrative evil, causing much injury, suffering, and death.

The heart of the Ford Pinto case was the marketing of a product known to be dangerous. The deaths that ultimately resulted in the lawsuit against Ford for reckless homicide stemmed from a road accident in Indiana in 1978. After being struck from behind by a 1972 Chevrolet van, a 1973 Ford Pinto carrying three teenage girls exploded into flames. Two girls burned to death in the car, while a third died later in the hospital. The accident occurred just two months after Ford had recalled all Pintos manufactured between 1971 and 1976 (Strobel 1980).

Dowie (1977) charged that Ford engineers had already found evidence of the Pinto's explosive nature before production even began. However, the assembly line machinery had already been tooled by the time the engineers discovered the defect. According to Dowie, Ford officials gave the go-ahead to manufacture the Pinto anyway, in order to fend off growing competition from Volkswagen and other Japanese carmakers in the sub-compact segment.

The most inflammatory piece of evidence used against Ford was an internal cost-benefit analysis. A Ford memorandum calculated that a human life was worth $200,000. Based on this figure, it was deemed more cost-effective to pay the estimated estates of 180 victims who might burn to death in a Pinto than to spend $11 per car on the necessary safety corrections to the gas tank (Dowie 1977).

Though Ford was ultimately acquitted of reckless homicide charges, it still settled many cases out of court. One judge awarded $6.3 million to a young boy who suffered burn injuries in a Pinto crash. Ford's lawyers initially believed the acquittal would absolve company leaders of responsibility for their products; the ongoing trials against Enron officials, however, did not lend credence to that prediction.