3. 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
4. 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
5. 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
7. 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 Iacocca’s commands
regardless of their opinions since he is
their superior in the company
8. 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?
9. 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
10. 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
11. 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
12. Pros
Repairs the safety defect
Saves Ford from potential
lawsuits
Protects Ford’s reputation
Cons
High cost
Slight delay before launch
13. Pros
A cheaper alternative could
be found
Profit margin could be
higher than first
alternative
Repairs the safety defect
before launch
Cons
Pinto release would be
delayed indefinitely
Still decreases total profit
14. Pros
Design can be more
focused on safety
Improve Ford’s reputation
Cons
Significant delay of launch
Most costly alternative
15. Pros
Releases the Pinto to the
customers immediately
The 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
16. 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
17. 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
