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?

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?

Safety?
What
safety.

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

PROS

Repairs the safety

defect

Saves Ford from

potential lawsuits

Protects Fords
reputation

CONS

High cost

Slight delay before

launch

PROS

CONS

A cheaper alternative
could be found

Pinto release would be

delayed indefinitely

Profit margin could be

higher than first
alternative

Still decreases total

profit

Repairs the safety

defect before launch

PROS

CONS

Design can be more

focused on safety

Significant delay of
launch

Improve Fords
reputation

Most costly alternative

PROS
Releases

the Pinto to
the customers
immediately
largest profit
margin is obtained
from each Pinto sale

CONS

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

The

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