Ford’s Pinto Case: an Analysis
The Ford Pinto, first introduced in 1971 and built through the 1980 model year was an American subcompact car manufactured by the Ford Motor Company. It became a focus of a major scandal when it was alleged that the car’s design allowed its fuel tank to be easily damaged in the event of a rear-end collision which sometimes resulted in deadly fires and explosions through early production of the model. A number of critics have claimed that the Ford Motor Company acted unethically in producing the Ford Pinto as it did, knowing that it could have been made safer by adding an inexpensive part. (Wikipedia, 2006)
Pinto was designed to compete with Japanese cars and to keep up with the market demand. It was designed in two years rather than the usual three to four years. Ford found out during the testing phase that Pinto’s gas tank had a high risk of exploding when impacted from the gear. Likewise, an estimated 500 people have been burned to death in otherwise survivable accidents in Pintos. (Gioia, 1992).
Ford continued the production although its executives know that the car had a defective design. The company produced over two million Pintos (Dardis & Zent, 1982). Dennis Gioia (1992) identified two principles on which Ford executives based their decision. “First, they believed that ‘safety doesn’t sell’. Second, Ford had a corporate norm that required managers to adhere to the production ‘limits of 2,000’ that aimed to keep the cost and the weight of the car below ,000 and 2,000 pounds”.
Ford executed a utilitarian cost-benefit analysis to seek an objective process of determining whether to alter the vehicle to reduce the risk. The analysis indicated that it was cheaper to sell the fire-prone cars than to fix it. The estimated cost to solve the fuel tank problem was per car and the estimated value of a human life was at 0, 000. This further showed that it would be more expensive to fix a car than to live with the possibility of over a hundred fatalities (Dowie, 1977)
In short, Ford executives chose to wait until they were sued because settling a few lawsuits filed by burn victims or their families was more cost-effective than modifying the initial design (Velasques, 1982). Therefore, Ford’s decisions were based on organizational values that emphasized conformity and cost-effectiveness (Gioia, 1992).
Analyzing this action, Ford then was being socially responsible since they used the government’s numbers as an objective standard and they took time to objectively weigh a decision that most other manufacturers would have simply skipped. The car works as promised and in itself was not dangerous. Ford certainly would sell a larger car if anyone wanted a safer car. The fault really lay with the drivers since Ford inquired as to how far they could go to deliver a safer vehicle within the parameters set. Therefore, Ford ran parallel on the act utilitarianism wherein the good is calculated for a specific action at a specific time. Nonetheless, act utility is a form of moral cost-benefit analysis that business, by its nature, is already prone to factor. (Faculty Web Pages, n.d.)
On the one hand, there was a drive to meet the desires of consumers for reliable, smaller and affordable transportation. This desire was met through the Pinto cars. This also helped pull the US industry into a new market. Moreover, it obviously helped the employees and stockholders of the auto industry and the economy as a whole. However, when the scandal was eventually made public, the public reaction was strong and undeniable. Obviously, Ford had not factored in something significant into its calculations. (Faculty Web Pages, n.d.)
Ford inevitably focused on the short-term and acknowledged only the limited subset of stakeholders. The company had a traditional view which originates at the pre-conventional and the conventional levels of moral development. Ford would have fixed the Pinto if they cared about victims injured by this car. Thus, the Ford itself was a morally bounded company/organization because they do not or cannot recognize the full range of the consequences of their actions and decisions for themselves and for other stakeholders. For Kant, someone who tries to ground morality in consequences and in self-interest has not understood the nature of morality. (Alpaslan & Mitroff, 2004)
Likewise, The Ford as a morally bounded company believed that it is ethical to sacrifice a few people in the name of the greater good for themselves or for greater numbers of people. They treat human beings as inputs to a societal utility function. In the context of business, they value profits above everything else because doing so serves greater numbers of people in the context of business. Thus, they inevitably put a price on human life. (Alpaslan & Mitroff, 2004)
Proactive crisis management (PCM) emphasizes the importance of telling the truth and keeping the public informed before or at the first hint of a crisis. RCM, on the other hand, calculates the expected costs and the benefits of hiding the truth from the public. If the Ford exposed Pinto’s problem to the public, then the public will not buy that car or it will lessen the buyers. Conversely, Pinto consumers will be safe from any accidents that might happen when driving or using the car since they already know the danger and they already have the knowledge that Ford Pintos were prone to catch fire as a result of rear-end collisions. However, Ford’s decision of hiding the truth to the public led to a worse consequence to everyone in the end. (Alpaslan & Mitroff, 2004)
Ford engaged in ethical cynism by deciding not to bother with the alteration of the cars. The company compared two incomparable things: financial profits and people’s lives and safety. In this regard, it was more an issue of morality rather than ethics. Morality implies not doing harm while ethics propagates doing well. By not considering how harmful their actions could be, Ford then, behaved immorally. The management should have taken harm factors into account from the point of view of their financial risks, standard deviation and cash flow not from a human life perspective. (Anderson, 2002-2006)
Credit:ivythesis.typepad.com
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