Pinto Fires

Case Analysis: Pinto Fires

Introduction

Greed is the root to evil or at least the motivation behind some corporations making a good, ethical decision. The Ford Motor Company fell into a trap of greed that would cost many human lives. Before the disaster of the Pinto Fires, Ford had a reputation as being the safety pioneer in the automobile industry with additions such as the seat belts. However, as the invention of small cars began to take emerge Ford began to loose market shares to the foreign market. Ford had to do something and quick.

Foreign markets were beginning to show promise with the vehicles that were going to put out on the market. The Ford Motor Company began to feel the pressure and felt that it needed to be in the limelight of the competition. Lee Iococca, the CEO of Ford, decided that it was time for a change and thus the Ford Pinto was introduced. However, the Pinto had numerous flaws that cost the Ford Company more than ever anticipated.

Relevant facts

During the 1960's the demand for sub-compact cars was rising on the market. Ford Motor Company, in competition with the foreign market, decided to introduce the Ford Pinto. The Ford Pinto was going to be the new wave for the Ford Company, but it was soon discovered that numerous problems existed. For example, the time that it took to manufacture an automobile was down from three and a half years to just over two years. Before production, however, the engineers at Ford discovered a major flaw in the cars design. In nearly all rear-end crash test collisions the Pinto's fuel system would rupture extremely easily (The Ford Pinto, n.d.). Other problems that were discovered compounded the problem that caused the fires. These included the gas tank being about six inches from the flimsy bumpers, the backend not containing rear sub frame members, and doors tending to jam shut in an accident. The fuel filler tube was prone to separate and create spillage (Alfred, n.d.).

When it was discover that the gas tank was unsafe, no one bothered to tell Lee Iacocca about the flaws. One engineer was quoted as saying, "Hell no, we didn't tell him. That person would have been fired. Safety wasn't a popular subject around Ford in those days. With Lee it was taboo. Whenever a problem was raised that meant a delay on the Pinto, Lee would chomp his cigar, look out the window and say, 'Read the product objectives and get back to work'" (Dowie, 1977). The objectives proposed by Iacocca were "the limits of 2000". This meant that no car could weigh an ounce over 2000 pounds or cost more than $2,000 (Nelson & Trevino, 2004).

At the same time that the Pinto was in production, the government began to regulate automobile safety. The Federal Motor Vehicle Safety Standard 301 was proposed in 1968 but lobbyists from the auto industry convinced the government to delay regulations on fuel tanks for eight years (Dowie, 1977) even though hundreds of lives were being lost annually. Adoption of the standard would have reduced the rate of death by 40% (Nelson & Trevino, 2004).

One of the tools that Ford used to convince the government to delay the regulations was a cost/benefit analysis to alter the fuel tank. The analysis showed that the benefits paid out to affected individuals would be around 49.5 million. To correct the problem for each vehicle with an $11 part would cost 137 million. Ford's cost/benefit analysis, which placed a cost on human life, stated that it wasn't profitable to make changes to the vehicles (Ford Pinto, n.d.). Ford argued before the government that it would be cheaper just to let their customers burn (Dowie, 1977)!

Symptoms of the problem

In 1978 on august 10th, three teenagers stopped to refuel their 1973 Ford Pinto. After they were through filling up, the driver of the Pinto reapplied the gas cap loosely. The gas cap subsequently fell off as the teenagers were driving down U.S. Highway 33. The teenagers stopped in the right lane of the highway shoulder to retrieve the gas cap. There was no safety lane for cars to pullover in an emergency. Shortly after the teenagers had stopped, a van weighing over 400 pounds and modified with a rigid plank for a front bumper struck the stopped Pinto. The van was going 55 MPH. The Ford Pinto burst into flames immediately. Two of the teenagers in the vehicle died at the scene of the accident. The driver was ejected from the Pinto and later died at the hospital after several excruciating hours.

The Pinto disasters that were taking place did not go unnoticed by the government. The National Highway Traffic Safety Administration (NHTSA) began investigating the case shortly after the Pinto started rolling off the assembly line. The studies took months, which was what Ford wanted. The results were worse than anyone could have imagined. Robert Nathan and Associates, a Washington research firm, found that 400,000 cars were burning up every year, burning more than 3,000 people to death. Furthermore, auto fires were increasing five times as fast as building fires. Another study showed that 35 percent of all fire deaths in the U.S. occurred in automobiles. Forty percent of all fire department calls in the 1960s were to vehicle fires- a public cost of $35 million a year, a figure that, incidentally, never shows up in cost/benefit analyses. Also a report was prepared for NHTSA by consultant Eugene Trisko entitled "A National