Bus 303

Group N

Summary
Cost Benefit Analysis
Ethical Issues
Change
Alternatives
Recommendation

 The Ford Pinto a small car to compete with

foreign car company competitors

Pinto weighed 2000 lbs and cost $2000
Rushed project led by Lee Iacocca
Planning took 25 months compared to the

industry norm 43 months

 Testing found several safety defects

@ 25mph+ the gas tank would rupture in an

accident
@ 30mph+ rear endings would cause the gas

tank to leak and the rear of the car to be folded

up into the back seats
@ 40mph+ the car doors would jam

With Current Gas Tank

With Safety Alteration

180 burn deaths

Cost = $11 per vehicle

180 serious burns

Total = $137 million

2100 Pintos burned

Costs = $200 000 per death
$67 000 per serious injury

Second alternative = Rubber

Bladder

$700 per car

Cost = $5.08 per vehicle

Total = $49.5 million

Total ~= $64 million

Ford employees
Lee Iacocca
Henry Ford II

 Were they morally responsible to

refuse to produce a car they knew

would hurt the customer?
Should they have put more effort

into convincing Iacocca that this

car was unsafe?
Should they follow Iacoccas

commands regardless of their

opinions since he is their superior
in the company

 Is Iacocca responsible for the safety

of his customers?

Safety?
What
safety.

Should he maximize profits for the

company at any costs?

If safety defects are found after

production, does he have a moral

obligation to inform all his customers?

Should Iacocca have established a working

environment where his employees did not feel

that they would lose their jobs for disagreeing
with him?

 Should Ford have trained his managers and

presidents in safety?

Does Ford have a responsibility to design a culture

that encourages employees to bring up safety

defects?

Does Ford need to have a new policy that puts the

has safety of their products more important than

maximizing profits?

Does Ford have a moral responsibility to do what is

best for his shareholders

 Young and ambitious new president

Foreign competitors entering N.A. market
No small car to compete with VW Beetle and others

The demand for results and

profits are the most

important aspect of
business

1. Pay the $11 per vehicle

2. Explore different safety features
3. Restart the project from the planning

process
4. Continue with production of the Pinto

Cons
Repairs the safety

High cost

defect
Slight delay before
Saves Ford from

potential lawsuits
Protects Fords

reputation

launch

Cons
A cheaper alternative

could be found
Profit margin could be

higher than first

alternative
Repairs the safety

defect before launch

Pinto release would be

delayed indefinitely
Still decreases total

profit

Cons
Design can be more

focused on safety
Improve Fords

reputation

Significant delay of

launch
Most costly alternative

Cons
Releases the Pinto to

the customers
immediately
The largest profit

margin is obtained
from each Pinto sale

Selling unsafe products

to customers could
lead to serious injuries
and deaths
High chance of lawsuits

against the company

If/When injuries occur,

loss of reputation

Explore Other Safety Measures

Repair the Pinto so that it is a cheap, safe car

that will please the customers

Act as a responsible company and not expose

customers to unknown risks

Implement a more cost effective option than

adding the $11 safety addition

Save lives by not releasing unsafe Pintos

 Ford workers were afraid to talk to Iacocca about the

safety defects

In Feb. 1978, Ford was sued for $128 million more

then 3 times the amount they had predicted

May 1978 Department of Transportation announces

defects with the Ford Pinto Ford recalls 1.5 million

Pintos

Mar. 1980 Ford was charged with reckless homicide

acquitted of charges, however they stopped all

Pinto production