1. INTRODUCTION

(Photo: http://static.howstuffworks.com/gif/1971-1980-ford-pinto-1979.jpg)

In the late 1960s, Ford began the development of a subcompact car that it hoped would compete with small inexpensive imports. In an apparent effort to maximize profit, Ford executives set strict specifications for the car, mandating that it be “2000 pounds and $2000" (Birsch). In order to get the car to market as quickly as possible, Ford implemented a rushed production schedule. In 1970 Ford introduced the Pinto, a car that would sell well for the next several years.  

From 1970 to 1976 a number of rear end collisions involving the Pinto resulted in fires and deaths. In September 1977, Mother Jones published an article, "Pinto Madness," that brought attention to the car's problems, accusing Ford executives of producing a car they knew was fatally flawed. One of its primary accusations was that preliminary crash tests done on the Ford Pinto demonstrated how low-speed rear-impact crashes were likely to cause fire due to the placement of the fuel tank. Perhaps the most surprising of all, however, were the allegations that Ford executives implemented a cost-benefit analysis to decide if issuing a recall would be financially advantageous. Allegedly, the results of the cost-benefit analysis influenced Ford to forgo modifications and release the car as it was.

In 1978, while in the midst of civil suits and mounting bad press from the Mother Jones article, Ford recalled approximately 1.5 million Pintos (model years 1070-76) to fix the fuel tank issue. Later in that same year, Ford was charged with reckless homicide in Indiana, the first criminal offense ever charged against a corporation. The principle argument in the case was that Ford had allowed the Pinto “to remain on Indiana Highways, knowing full well its defects" (Flammang). Although Ford was eventually cleared of criminal charges, the Pinto was a public relations nightmare and was unceremoniously removed from production by the 1980s.
 

NEXT: BACKGROUND

2. BACKGROUND

                         (Video: http://www.youtube.com/watch?v=rcNeorjXMrE&feature=player_embedded)

Ford Motor Company Background

Ford Motor Company was founded June 16, 1903 by Henry Ford (1863 – 1947). Ford’s most notable accomplishment was the invention of the moving automobile assembly line in 1913 which was in response to the climbing demand for the Model T. Ford believed that efficiency in producing automobiles would happen if all employees were assigned one place to work where they could focus on a specific job. During the beginning stages of the assembly line, the Model T could be assembled in 12 hours and eight minutes. A year later, the efficient assembly line was able to roll out a completed Model T in 93 minutes. In 1914, Ford Motor Company was able to produce over 308,000 Model T’s. In today’s fast paced society, 308,000 cars doesn’t seem like much; however, this number was more than all 299 other car manufacturers combined during the same year. The success of the line coupled with the vehicle's popularity allowed Ford to drop the price from $850 to $350 dollars, fueling even more demand.

In 1941, Ford Motor Company shut down its civilian automobile production due to WWII to produce B-24 bombers. After the war, the government terminated Ford’s contracts and the company started to suffer losses of $10 million per month. In 1945 Henry Ford II took over as president and for the next three decades returned Ford Motor Company to profitability. In 1955 Ford introduced the two seat Thunderbird roadster which outsold the comparable Chevrolet Corvette 24 to 1. In 1963 Ford introduced another highly successful sports car called the Mustang. Then in the late 1960s, amid growing foreign competition, Ford decided to add a smaller subcompact to their fleet of large gas-guzzling offerings. They designed and built the Pinto which was released in 1970 to compete with the success that the Japanese imports were having. It wasn’t until the 1970s during the OPEC oil embargo that Ford felt the impact of their gas-guzzling cars as consumers turned in droves to the smaller, more fuel-efficient Japanese vehicles (Ford Motor Company).

Reputation

In the minds of the U.S. consumer, Ford had a very good reputation leading up to the Pinto. They were the number 2 U.S. automaker behind only General Motors. It is believed that the main reason for General Motors dominance was due to their overall larger selection of models to choose from. One of the factors that helped contribute to Ford’s reputation during this period was their commitment to vehicle servicing. Another reason for Ford’s popularity came from their F-Series pickup truck, Bronco and Ranchero offerings. Overall, Ford was considered a solid and trustworthy company in the minds of the general population.

Mechanical Issues of the Pinto

The Ford Pinto’s gasoline tank was located behind the rear axle. In a rear-end collision of about twenty-eight miles per hour or more, the rear of the car would be crushed. This caused the fuel tank to be driven into the bolts of the differential housing causing the tank to split and allowed fuel to leak out. In addition, the filler pipe could be torn loose from the tank and additional gasoline might leak in this area. When fuel leaks from the gas tank, the evaporating fumes may enter and surround the car. Any spark caused by the friction of metal hitting metal in the crash or from the electrical system can ignite the vapor and create an explosion (Birsch). Another issue of a rear-end collision was the passenger doors becoming jammed which locked the passengers inside to burn with the car (Engineering.com).

                                                                            (Image: Birsch 1994, p. 8)

         

                                                                      (Image: Engineering.com)

During the design phase of the Pinto, Ford had two options to choose from in placing the fuel tank. The tank could be placed over-the-axle which had been used on the Ford Capri or it could be placed behind-the-axle. Placing the tank behind the axle was standard for the industry in regular sized cars and was also the standard for the Japanese subcompacts. The testing for a tank placed over-the-axle faired well in the Capri model. There were drawbacks to this design choice due to the engineering that was needed for the filler tube and the tank being placed above could cause a center of gravity issue which could impact the car's stability. Also, placing the tank above the axle severely reduced the trunk space and could not be used if a hatchback or station wagon model were to be introduced. Since the behind-the-axle model provided more trunk space and could be utilized in a hatchback or wagon models, Ford decided to build the Pinto with this design even though it was not considered as safe (Birsch).

Crash Testing of the Pinto

There is evidence that Ford knew in 1970 that the Pinto posed a serious fire hazard due to crash tests performed on the Pinto itself and other, similar models.  In nearly all of the tests the filler pipe was pulled out of the tank and fuel leaked.  By 1972 at least six additional crash tests ranging from about 15 mph to about 30 mph were performed on the Pinto.  Some of the tests were performed on Pintos that had been modified to limit fuel leakage and some were performed on unmodified Pintos.  The modified Pintos performed significantly better (leaked much less fuel) than the unmodified versions.  Thus, "the tests showed that the car was potentially unsafe following relatively low-speed, rear-end collisions."  (Birsch, p.11)

Ford's Economical Considerations

After problems surfaced and during the production of the Pinto through 1976, it was projected that a $6.65 part would help make the fuel tank safer during a rear-end collision. However, a Ford memo recommended that rather than making any voluntary safety changes, Ford should wait until 1976 when the government was expected to introduce new fuel tank standards. By delaying any production changes until the new standard was placed into effect in 1976, Ford believed they could save $20.9 million dollars (Degeorge).

Some of the options Ford considered in fixing the problem were to place a rubber bladder inside the fuel tank. This would help prevent gasoline from leaking if the differential bolts pierced through the metal of the fuel tank. Also, it was recommended that they could place plastic shields to prevent the tank from coming into contact with the edges and bolts of the shock absorber and rear differential.

In 1978, amid pressure from a highly publicized issue, Ford elected to voluntarily recall 1.5 million 1971 – 1976 Ford Pintos. The modifications included: a longer fuel filler neck and a better clamp to keep it secured in the fuel tank, also a better gas cap, and placement of plastic shields between the front of the fuel tank and the differential to protect the tank from the nuts and bolts on the differential as well as another along the right side of the tank to protect it from the rear shock absorber (NHTSA).

NEXT: INCIDENTS

3. INCIDENTS

A Mother Jones Classic: "For seven years the Ford Motor Company sold cars in which it knew hundreds of people would needlessly burn to death."

- Mark Dowie

Multiple rear impact collisions with the Ford Pinto have resulted in loss of life. The following three incidents are examples of the types of accidents that resulted in loss of life.

  

Incident 1
 

“In May 1972, Lily Gray was traveling with thirteen year old Richard Grimshaw in a 1972 Pinto when their car was struck by another car traveling approximately thirty miles per hour.  The impact ignited a fire in the Pinto which killed Lily Gray and left Richard Grimshaw with devastating injuries” (Leggett 1999). 

Incident 2 
 

“On August 10, 1978, three teenage girls stopped to refuel the 1973 Ford Pinto sedan they were driving. After filling up, the driver loosely reapplied the gas cap which subsequently fell off as they headed down U. S. Highway 33. Trying to retrieve the cap, the girls stopped in the right lane of the highway shoulder since there was no space on the highway for cars to safely pull off the roadway. Shortly thereafter, a van weighing over 4000 pounds and modified with a rigid plank for a front bumper was traveling at fifty five miles an hour and struck the stopped Pinto. The two passengers died at the scene when the car burst into flames. The driver was ejected and died shortly thereafter in the hospital” (Leggett 1999).

Incident 3
 

“The Pinto’s fuel system design and the decision to delay upgrading it’s integrity created a major public backlash, which was heightened by the dramatic criminal trial of Ford Motor Co. in connection of the death by fire of three young women” (Birsch & Fielder 1994). On August 10, 1978, the Ford’s fuel design system contributed to the death of three women “when their car was hit by another vehicle traveling at a relatively low speed by a man driving with open beer bottles, marijuana, caffeine pills and capsules of "speed." The fact that Ford had chosen earlier not to upgrade the fuel system design became an issue of public debate as a result of this case.” (Leggett 1999).

Cost-Benefit Analysis

Based on the Crash tests that had been done, Ford knew the Pinto posed a serious fire hazard.  One of Ford's former engineers testified that the highest levels of management at Ford understood the danger but decided against making changes due to the potential costs.

There are legal grounds for performing a cost-benefit analysis.  In the 1947 case of United States v. Carroll Towing Co., Judge Hand effectively devised the cost-benefit analysis to help decide future cases. (Leggett)  Additionally, the NHTSA, a federal agency, approved the use of a cost-benefit analysis for determining car design safety standards. For the purpose of its cost-benefit analysis, Ford determined the value of human life at $200,000 per fatality.  Thus, the decision to issue a recall and install the necessary safety measures was weighed mathematically against the benefit of preventing a certain projected number of deaths.  The value of human life calculation and cost-benefit analysis ended up as follows:

Human Life Valuation:

                                                                       (Image: Birsch 1994, p.26)

Cost-Benefit Analysis:

                                                                        (Image: Birsch 1994, p.101)

Ford projected a cost of $137 million to fix the problem with only a $49.5 million benefit (notice that Ford's projection was based on the prediction of 2,100 burned vehicles and 180 burn deaths).  Ford determined that it would be much more costly to fix the problem in its entirety than to pay for the few cases that resulted from its poor design.  “The Ford Motor Company's risk/benefit analysis indicated costs would be 2.5 times larger than the resulting benefits” (Legget).  Ultimately, Ford decided not to implement the fixes in the development stages and continued to forgo the fixes once the car was on the road. (Birsch)

An eventual NHTSA investigation noted awareness of "38 cases of rear-end collisions and fires in Pintos that resulted in 27 fatalities and 24 cases of non-fatal burns" (Birsch, p.9).  Because these figures are based on lawsuits brought against Ford, it is likely that there were more fires and deaths than listed above.  While Ford estimates the Pinto being involved in 35 rear-impact fires, some critics estimate the number may be as high as several hundred. (Birsch)

                                                                  (Video: http://www.youtube.com/watch?v=rcNeorjXMrE)

NEXT: ETHICAL PREDICAMENT

(Top Photo: http://www.engineering.com/content/community/library/ethics/fordpinto/images/image003.jpg)

(Bottom Photo: http://imcdb.org/images/022/674.jpg)

4. ETHICAL PREDICAMENT

The Ford Motor company and its engineers faced a number of ethical predicaments during the development and production of the Ford Pinto.  Most notably, ethical problems arose concerning what the engineers' responsibilities were once it became clear from the crash tests that the Pinto had severe design flaws. Additionally, there were questions of what management's responsibility was when it came to the matter of issuing a recall.

                        (Image: http://inanotherlifetime.files.wordpress.com/2009/03/ethics-9651.jpg)

Engineers

Harley Copp was a former Ford engineer who has testified that the highest levels of management at Ford understood the Pinto's problem with the fuel tank in crash tests but were unwilling to deviate from the design if the change would cost money.  The National Highway Traffic Safety Administration (NHTSA) issued Standard 301 in 1976, a regulation limiting the amount of fuel that could leak from the tank in a rear end collision. Ford’s 1977 Pinto model met regulation, but its earlier (1970-76) model would not have met Standard 301. (Although, it did meet existing standards at the time of production). (Birsch)  The engineers prepared several reports in the early 1970's that showed that unless the fuel system was repackaged it would not meet proposed fuel leakage guidelines (The National Highway Traffic Safety Administration (NHTSA) issued Standard 301 in 1976, a regulation limiting the amount of fuel that could leak from the tank in a rear end collision. Ford’s 1977 Pinto model met regulation, but its earlier (1970-76) model would not have met Standard 301). (Birsch, p.58-59)


A rights ethics analysis of the engineers' situation would probably find the engineers' lack of action to be problematic.  Rights ethics emphasizes the exercise of liberty in the context of truth and trust.  The only people who fully understood the seriousness of the Pinto problem for the first few years of its production were people within Ford.  People purchasing the Ford Pinto in its early years were doing so without a full understanding of its problems, so their liberty to make an informed choice and their right to drive a safe vehicle were being infringed upon.  A rights ethics analysis of the engineers' situation does seem to call for the use of more drastic whistle-blowing behavior. (Martin)


Management

After being informed of the Pinto's design flaws, management at Ford had to decide whether or not to implement the suggested fixes.  Besides wanting to simply minimize costs, Ford management utilized the previously mentioned cost-benefit analysis to determine whether or not to implement the fixes or, once the car was in production, issue a recall right away.

Ford's management decisions regarding the Pinto do not seem to hold up well to ethical analysis (especially rights or duty ethics) but, there does seem to be potential for justification when a utilitarian ethics analysis is applied.  Utilitarianism calls for the most good for the most people.  The 'most good' in the Pinto's case is accomplished when economics is the sole consideration. Ford does good for itself by saving millions of dollars in  recall, retooling, and repair costs and the majority of customers (all customer minus the one's who suffer a catastrophic rear end collision) benefit from a lower price at the dealership.  The problem with a utilitarian ethics analysis is that it can fail to account for a problematic distribution of 'evil'.  In other words, while a majority of Pinto owners benefited from being able to purchase a less expensive car, those owners who did suffer catastrophic rear-end collisions bore the entire brunt of the 'evil' associated with the decision to allow  for such failures. (Martin)

NEXT: AFTERMATH

5. AFTERMATH

Company Action 

Ford remained non-compliant with the suggested safety measures through the first half of the 1970's.  However, attention from the Mother Jones article, increased public scrutiny, and increasingly stringent safety laws, (most notably a 1976 NHTSA law which implemented stricter standards for gas tank leakage), compelled Ford to act.  Subsequently , on June 9, 1978, Ford announced a recall 1.5 million Pintos that were made from 1971 to 1976. (Birsch p.5)  The estimated cost of the eventual recall was "somewhere between twenty and forty million dollars." (Birsch p.5)  

Victim Action

In September of 1978 Ford Motor Company was indicted by an Indiana Grand Jury for three felony counts of reckless homicide.  The case resulted from a rear-end collision between a van and a Ford Pinto.  In the car were three girls, who all burned to death.  People on the scene claimed that the collision occurred at a relatively low speed.  The significance of the Indiana trial was that it was the first time a corporation had been charged with criminal violations rather than simply civil violations.  When the trial concluded in March of 1980 Ford was judged to be innocent of all charges.  The last Pinto was produced in 1980. (Birsch p.5-6)

NEXT: CURIOUS TO KNOW MORE?

(Photo: http://www.mass.gov/legis/bills/senate/st00/gavel.jpg)

6. CURIOUS TO KNOW MORE?

Though perhaps the most well known example of an ethically-troubling corporate cost/benefit analysis, the Ford Pinto analysis was certainly not the first or last of its kind. Indeed, it is very likely that many other companies have conducted similar analysis to determine whether or not it is preferable to remedy a problem, or rather settle the few cases that arise in court. Below are some examples that show how a cost-benefit analysis may be used to save money while endangering the lives of consumers.


Ford at it Again

According to a 2001 article from the Albany Times Union, Ford Motor Company was facing a class-action lawsuit from defective ignition systems in nearly 20 million cars it had produced between 1983 and 1995. While Ford dismissed the charges claiming that the ignition systems were acceptable, their internal memos paint a different story. According to the article, “the company was concerned that the ignition design could make engines stall -- resulting in ``rapid catastrophic failure'' -- at high temperatures.” Furthermore, Ford seemingly used this faulty ignition system in order to save $2 per car in manufacturing cost. In a case in which 11 people have been killed, along with another 31 injured by 2001, the judge overseeing the case asserted that Ford full-well knew of the impending dangers of the ignition, and chose to conceal it.  (Kravetz)
 
The Story


Thought Experiment: Pharmaceutical Responsibility

Consider a case where a pharmaceutical company released medication to treat depression. The medication is wildly effective, with nearly 85% of patients reporting a significant change in quality of life. However, in a few cases it has been shown to induce cardiac arrest so massive that it is nearly always fatal. Due to the benefits seen by the medication, the company has conducted a cost-benefit analysis and concluded that the amount that will be paid out annually to those harmed by the medication will be, on average, around 30 percent of the profit yielded. The issue in this case, like in the case of the Pinto, is whether or not it is ethical for the company to sell a product that will knowingly result in the death of some of its users.


Mother Jones Magazine
 
The October 1977 issue of Mother Jones was the first to officially spill the guts about Ford’s cost-benefit analysis in regards to the Pinto. You can read the original story from over thirty years ago here: 
  
Mother Jones - October 1977


Just for Fun

A sound clip from the movie Fight Club, where the main character discusses his job as a cost-benefit analyst. WARNING: Contains some graphic language.

Clip

NEXT: REFERENCES

7. REFERENCES

Birsch, Douglas, and John H. Fielder. (1994). The Ford Pinto case : a study in applied ethics, business, and technology. State University of New York Press. Print.

De George, Richard. (1981) Ethical Responsibilities of Engineers in Large Organizations: The Pinto Case. Business and Professional Ethics Journal. 1.1: 1-14. Print.

Dowie, Mark. (1977). Pinto Madness. Mother Jones. Retrieved March 25, 2010.
http://motherjones.com/politics/1977/09/pinto-madness

Engineering.com. Engineering.com, n.d. Web. 28 Mar 2010.

http://www.engineering.com/Library/ArticlesPage/tabid/85/articleType/ArticleView/articleId/166/Ford-Pinto.aspx

Flammang, James M. Ford Pinto rear-impact defect (1971-1976).  Electronic pdf:
https://myasucourses.asu.edu/webapps/portal/frameset.jsp?tab=courses&url=/bin/common/course.pl?course_id=_120679_1

Ford Motor Company. Gale Encyclopedia of U.S. Economic History. 1999. Encyclopedia.com. 20 Mar. 2010 
http://www.encyclopedia.com/doc/1G2-3406400329.html

 Ford Pinto. Engineering.com. Engineering.com, n.d. Web. 28 Mar 2010 

http://www.engineering.com/Library/ArticlesPage/tabid/85/articleType/articleView/articleId/166/Ford-Pinto.aspx

Kravets, David. Suits Fault Ford in Deadly Crashes. The Albany Times Union. 20 Aug 2001. 30 Mar, 2010:
http://alb.merlinone.net/mweb/wmsql.wm.request?oneimage&imageid=6123496

Leggett, Christopher. The Ford Pinto Case: The Valuation of Life as it Applies to the Negligence-Efficiency Argument. Law & Valuation. Retrieved March 25, 2010.
http://www.wfu.edu/~palmitar/Law&Valuation/Papers/1999/Leggett-pinto.html

Martin, M. W. and Schinzinger, R. (1989). Moral Reasoning and Ethical Theories. Ethics in Engineering, 2nd. ed. McGraw-Hill, New York.

NHTSA. (1978). Alleged fuel tank and filler neck damage in rear-end collision of subcompact passenger cars [Phase I C7 - 38]. (Adobe Reader version), Retrieved from:

http://www.autosafety.org/sites/default/files/ODIPinto.pdf

Pasquarello, Greg. Ford Pinto. Engineering.com. Retrieved March 25, 2010.
http://www.engineering.com/Library/ArticlesPage/tabid/85/articleType/ArticleView/articleId/166/Ford-Pinto.aspx