In 1968, Ford Motor Company made plans for a car that would be inexpensive, small, and appeal to all car buyers. The planned project was to meet the 2000/2000 rule, meaning that the Pinto could weigh no more than 2,000 pounds, and cost no more than $2,000. This rule was instituted because of the extreme competition from foreign car makers such as Toyota and all of the automotive companies at the time. However, the 2000/2000 rule left designers with limited ability to design a car the way it should be designed. The Pinto was brought into production faster than any other car had ever been produced; twenty five months from the inception of the idea of the Pinto to production when the industry average at the time was forty-three months. The engineers had to cut corners in the design and were rushed building the Pinto, which later resulted in many mistakes that were overlooked. The first Pinto was put on the market in 1971.
The Pinto’s problems originated with placement of the gas tank. It was customary to place the gas tank between the rear axle and the bumper to give the vehicle more truck space. However, on the Pinto the gas tank was only nine inches away from the rear axle and on the rear axles transfer case were bolts that stuck out facing the rear bumper of the vehicle. When the Pinto was rear ended, the gas tank would be forced up to the rear axle, and the transfer case bolts would puncture the gas tank. Also the fuel filler pipe was poorly designed and could easily become detached in a rear end collision, causing gasoline to spill over the ground. This was the cause of the numerous large fires and the gas tank tendency to explode. Explosions of the gas tank occurred at any collision at or above thirty one miles per hour. The doors on the Pinto would tend to jam shut when rear ended at high speeds, causing victims to burn alive if not killed on impact.
Due to the serious defects and the numerous deaths involved with the Pinto, there were many law suits against Ford Motor Company. Dennis Gioia, an engineer and MBA graduate, was involved in the decision not to recall the vehicles. Ford came up with a Cost Benefit analysis. The benefits accounted for 180 burn deaths prevented, 180 serious burn injuries prevented, 2,100 burned vehicles prevented. If those number are multiplied by $200,000 per death, $67,000 per injury, and $700 per vehicle, the final benefit to society, or amount of money Ford would have to pay if they did not recall any of the their vehicles, was $49.5 million. Compared to the cost to recall 11 million cars and1.5 million light trucks, at $11 per vehicle would equal $137 million on recalls. Ford believed they were justified in not recalling the cars due to the amount they would spend on recalls far out-weighed the amount they would spend to compensate customers for death, injury or harmed cars.
ANALYSIS OF GIOIA’S DECISION
Ford eventually agreed to recall the Pinto on June 10, 1978. They sent out the recall notices on August 22, 1978. Ford originally gave four reasons why they did not want to recall the Pinto:
1) Ford had based an earlier advertising campaign around safety, which failed. 2) The bad publicity involved with a recall would be too much negative publicity to overcome. 3) At the time of the product designs and crash tests, the law did not require them to redesign the fuel system. 4) It was customary in the automotive industry to place the gas tank between the rear axle and bumper. We will evaluate Gioia’s earlier decision to choose not to recall the vehicles based on the reasons noted above. Dennis Gioia had started as an advocate for human rights and protection, prior to his appointment to the position at Ford Motor Company. He was aware of the design defects with the Pinto, however, he succumbed to the corporate rhetoric of buyer risk and consumer demand as rational for the decision to keep the Pinto on the market.
Generalization theory – A rational choice must be generalizable , the reason for a certain action should be consistent with the assumption that everyone who has the same reasons will act the same way. The decision to keep the Pinto on the market passed the generalizations test:
1. The Cost Analysis used was acceptable in the production market
2. The vehicle met applicable safety laws at the time of production
3. The placement of the gas tank was in compliance with car production standards
4. Consumer demand for the vehicles increased profits
5. The recall would reduce profits and negatively impact the company .
The decision also passed the utilization Test
Utilitarian theory – We all have some ultimate end that is called utility. An action is ethical only if no other available action creates greater total utility.
1. A greater number of consumers were happy with the vehicle than were injured or killed
2, Recalling the cars would create more financial loss than keeping them on the market with the defects
3. The cost to make the cars safer would have increased the cost of production and not meet the 2000/2000 concept mandated by the corporate leaders
4. The delay in production would have deceased the company’s ability to compete in the small car market and decrease profits,
Value ethics theory – virtue is a part of our essence and help describe who we are The decision not to recall the Pinto failed the value test.
1. A rational person with virtue and concern for human rights would not place a arbitrary price on the value of human life as opposed to profits.
2. Although a corporation is not a person it is an entity that relys of the people to value and purchase the products or services it provides
3. The decision to put an obviously flawed vehicle on the market and justify it by placing the responsibility on the consumer to accept the risk is irresponsible and reprehensible for any entity to adopt as a marketing strategy.
4. There is no virtue in a corporation or its management, that would routinely select profit over human safety and death, when they know it can be rectified.
Courtney from Study Moose
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