CASE STUDY

THE FORD PINTO

Presented By: Binsar, Chintya, Ricca, Rifky, Waila
Outlines :

Problems
Problem Solving Approaches
Clashes of Values
What Would We Do?

PROBLEM :

1. Trial Code Worth
2. Publications Human Values

PROBLEM SOLVING:

Add some technical improvement that cost extra
$11 per car before it was released
Recall the Pinto soon
Offer a rubber bladder installment that cost $5.08
per car
Release the Pinto and hide everything from public
+ Maintain its integrity
- Ford will lose its competitive edge in lucrative small-car market
+ Ford looks responsible with its product
- Lose its safety brand value, more cost is needed to settle.
+ Ford looks responsible with its product
- Lose its safety brand value
+ Ford have a competitive edge in small-car market, gain more money.
- If someone notices, Ford will come to an end.
Component 1971 Costs
Future Productivity Losses
Direct 132,000 $
Indirect 41,300
Medical Costs
Hospital 700
Other 425
Property Damage 1,500
Insurance Administration 4,700
Legal and Court 3,000
Employer Losses 1,000
Victim's Pain and Suffering 10,000
Funeral 900
Assets (Lost Consumption) 500
Miscellaneous 200
TOTAL PER FATALITY 200,725 $
Benefits
Savings : 180 burn deaths, 180 serious burn
injuries, 2,100 burned vehicles
Unit Cost : $200,000 per death, $67,000
per injury, $700 per vehicle
Total Benefit : 180 x ($200,000) + 180 x ($67,000) +
2,100 x ($700) = $49.5 million.
Costs
Sales : 11 million cars, 1.5 million light trucks
Unit Cost : $11 per car, $11 per truck
Total Cost : 11,000,000 x ($11) + 1,500,000
x ($11) = $137 million
Costs and Benefits analysis
PROBLEM SOLVING:

Add some technical improvement that cost extra
$11 per car before it was released
Recall the Pinto soon
Offer a rubber bladder installment that cost $5.08
per car
Release the Pinto and hide everything from public
http://www.motherjones.com/slideshows/2012/08/economics-comics-dark-money/economix-lee-iacocca-pinto
http://www.prioritythinking.com/Portals/0/ford-pinto.jpg
http://news.google.com/newspapers?nid=950&dat=19780901&id=PkZQAAAAIBAJ&sjid=VlgDAAAAIBAJ&pg=4835,20327
CLASHES of VALUEs:
1. Cost and benefits analysis and published
it to public.
2. News release that used to countering the
points made by Mother Jones.

WHAT WOULD WE DO?
1. Recall
2. Research and Development
3. Socialization