Business Ethics Case Study: Ford Pinto
Case Study: Ford Pinto
MGT/216
07/17/20
Case Study: Ford Pinto
Abstract
In 1971, Ford Motor Company (FMC), on the advice of then vice-president Lee Iacocca, introduced the first subcompact vehicle, the Ford Pinto. After production had begun and the release of the Pinto in the United States, Ford discovered a defect in the design on the fuel system; the gas tank was placed in the rear of the vehicle. This error could cause the vehicle to explode on low speed rear end collisions due to a bolt puncturing the fuel tank. Ford conducted a risk/analysis to determine whether to recall the vehicles or leave the situation as is and suffer the consequences as they arise. After concluding that the vehicles could be modified for $11 per vehicle, Ford decided not to recall the vehicles. Based on their risk/analysis the cost to recall the vehicles sold would be $137 million, Ford determined that it would be more profitable to leave the vehicles as is and pay out costs in lawsuits because this figure adjusted to $49.5 million, substantially lower than the cost to recall the product. Ethics and morals would prove to be ignored for profit and gain.
Ford Motor Company Pinto Case Ford Motor Company Mission Statement (1996), “We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world."
In 1978, three female teenagers died in automobile accident, the cause of this fatal accident was a rupture of the gas tank. As a result, the Ford Company was fined $30,000 for each conviction and millions of dollars in punitive damages to the families of the lost teens. The national Highway traffic safety administration broke down the average cost of an accident. The purpose was to make changes in the fatal accident involving three teenage females. The result of this cost consist of the following: Loses of productivity, medical, property, insurance, legal, and loss of employment, pain a suffering, funeral arrangements,
MGT/216
07/17/20
Case Study: Ford Pinto
Abstract
In 1971, Ford Motor Company (FMC), on the advice of then vice-president Lee Iacocca, introduced the first subcompact vehicle, the Ford Pinto. After production had begun and the release of the Pinto in the United States, Ford discovered a defect in the design on the fuel system; the gas tank was placed in the rear of the vehicle. This error could cause the vehicle to explode on low speed rear end collisions due to a bolt puncturing the fuel tank. Ford conducted a risk/analysis to determine whether to recall the vehicles or leave the situation as is and suffer the consequences as they arise. After concluding that the vehicles could be modified for $11 per vehicle, Ford decided not to recall the vehicles. Based on their risk/analysis the cost to recall the vehicles sold would be $137 million, Ford determined that it would be more profitable to leave the vehicles as is and pay out costs in lawsuits because this figure adjusted to $49.5 million, substantially lower than the cost to recall the product. Ethics and morals would prove to be ignored for profit and gain.
Ford Motor Company Pinto Case Ford Motor Company Mission Statement (1996), “We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world."
In 1978, three female teenagers died in automobile accident, the cause of this fatal accident was a rupture of the gas tank. As a result, the Ford Company was fined $30,000 for each conviction and millions of dollars in punitive damages to the families of the lost teens. The national Highway traffic safety administration broke down the average cost of an accident. The purpose was to make changes in the fatal accident involving three teenage females. The result of this cost consist of the following: Loses of productivity, medical, property, insurance, legal, and loss of employment, pain a suffering, funeral arrangements,
References: Ford Motor Company (2010). Retrieved from http://www.fordmotorcompany.com Legget, Christopher. (1999). The Ford Pinto case: The evaluation of life as it applies to the negligence-efficiency argument. Retrieved from http://www.wfu.edu/~palmitar/Law&Valuation/Papers/1999/Leggett-pinto.html National Academies Press. (2010). Retrieved from http://www.nap.edu/openbook.php Trivino, L. Nelson, K.A. (2007) Managing Business Ethics, Straight talk about how to do it right (4th e.d). Retrieved from the University of Phoenix eBook Collection database