Ford Pinto Scandal: Corporate Ethics and Legal Accountability

Introduction: The Ford Pinto Scandal

The Ford Pinto scandal stands as one of the most significant cases in corporate ethics. Ford rushed the Pinto to market because it faced intense competition from Volkswagen in the small-car segment. The company's engineers knew that rear-end collisions would cause the fuel tank to rupture, but the production system had already been tooled. Ford deemed it cheaper to pay out damages to victims than to address the design flaw. The company even lobbied the government to prevent regulatory changes that would have required a redesign. Ford conducted an internal cost-benefit analysis that assigned a monetary value to human lives and concluded that fixing the problem cost more than absorbing the death toll. Over five hundred people would ultimately die as a result of the Pinto's defective design (Dowie, 1977).

Ford engaged in this unethical behavior over the course of eight years. Its designers were aware of the flaw and the risk it posed to human life during pre-production testing. The company actively conducted the cost-benefit analysis and actively fought the legislation that would have forced a fuel tank redesign. The unethical activity was therefore not passive but deliberate, sustained over nearly a decade. In terms of social responsibility, Ford effectively adopted the position of Friedman (1970) that the only social responsibility of a business is to earn profits. Even Friedman, however, noted that corporations should "conform to the basic rules of the society, both those embodied in the law and those embodied in ethical custom." This implies that Ford's pursuit of profit over human safety violated even Friedman's own framework.

Ethical Analysis of Ford's Conduct

Cheeseman (2010) points out that a number of competing ethical theories can help resolve ethical dilemmas. Ethical fundamentalism holds that an individual should look to an outside source for ethical rules and commands (Lako, 2011). In this instance, either Friedman's view of corporate social responsibility or the general ethics of society would serve as a useful guidepost. Ford violated both by failing to account for the unique value that human life holds in our society.

Rawls addresses this issue perhaps more clearly when he seeks to define morally correct behavior in terms of what free and equal citizens would choose under fair conditions. This view would find that any social consensus on justice in this case would fall on the side of preserving human life. Nor does ethical relativism let Ford off the hook. Corporations may operate under a somewhat distinct set of ethical norms, but Ford violated even the most basic ethical code applicable to corporations. As Dowie (1977) points out, corporations are comprised of human beings, and human beings do not possess, under any social contract, the ability to engage in willful actions that result in the deaths of others — at least outside of times of war, and certainly not in the course of basic commercial activity.

Utilitarian and Kantian Perspectives

Utilitarianism prescribes that the morally correct action is the one that delivers the greatest good for the greatest number. Ford's decision-making could be characterized as a distorted form of utilitarianism: the company placed a price on human life and weighed it against the costs to management and shareholders. Kantian ethics takes the opposite view, holding that Ford's actions were morally unjust precisely because they resulted in the deaths of hundreds of people — deaths that the company had the power to prevent.

Conclusion: Justice and Corporate Accountability

Ford assembled a substantial defense team. It relied on expert testimony from an accident reconstructionist who defended the Pinto by drawing comparisons to tests run on a variety of other automobiles. The prosecution focused on attacking the credibility of Ford management and on the design of the Pinto itself, which it had to prove was the primary contributing factor in the deaths of the three girls. The court demanded a high standard of evidence and would not accept a hung jury. As a result, the jury was compelled to reach a verdict and returned a finding of not guilty. This outcome effectively ended further legal action against Ford; a guilty verdict would have opened the door to numerous additional suits against the company.

Ford was not found to have established mens rea or actus reus, though arguably the company's managers knew their actions would result in needless deaths. It is therefore reasonable to conclude that Ford management possessed mens rea, at a minimum. Nevertheless, Ford escaped prosecution — not on constitutional grounds, but on the merits of the case as presented.

The case was not, in this view, adjudicated fairly. There were significant disparities in the quality of the legal teams, placing the prosecution at a disadvantage. The company had plainly made a decision it knew would cost human lives. If the Indiana reckless homicide statute was insufficient to secure a conviction, another state or federal legal avenue should arguably have been pursued in order to hold Ford accountable for its actions.

Dole, C. (1980). Pinto verdict lets U.S. industry off hook. Christian Science Monitor. Retrieved November 13, 2012 from http://www.csmonitor.com/1980/0314/031435.html

Dowie, M. (1977). Pinto madness. Mother Jones. Retrieved November 13, 2012 from http://www.motherjones.com/politics/1977/09/pinto-madness

Friedman, M. (1970). The social responsibility of business is to increase its profits. New York Times Magazine. Retrieved November 13, 2012 from

Lako, C. (2011). Ethics for my scholars. [University]. Retrieved November 13, 2012 from http://www.bus.ucf.edu/faculty/clako/page/ETHICS.aspx