Ford Pinto: A Fiery Controversy

BE1200 Team 8 | Quiz 7

Is it ethically permissible to put a dollar value on human life? In a business environment like the automotive
industry where profits matter over everything else. Should the engineering community find it morally permissible to
employ such strategies as Cost-benefit analysis when weighing a decision between profits and public safety?
During the early 1970s the very profitable Ford Pinto was the largest selling subcompact car in America. It also
was a time where the automotive industry saw more safety improvements to cars than any other period in history.
Despite industry trends towards safety, crashes involving the Pinto frequently caused its gas tank to rupture. By
conservative estimates these crashes had caused 500 burn deaths to people who would not have been seriously injured
if the car had not burst into flames. Ford spent millions to lobby against stricter government safety standards even
though they already possessed the technology to improve the gas tank design. After pressure from Ford the National
Highway Traffic Safety Administration reported their cost value of a human life. Using this new formula Ford conducted
its own internal cost-benefit analysis, which placed a dollar value on human life, and decided it wasnt profitable to
make the changes to the fuel tank design.

Since the behind-the-axle design 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.
Ford engineers had discovered in pre-production crash tests that rear-end collisions would rupture the Pintos fuel
system extremely easy. Fighting strong competition from Volkswagen, and the fact that assembly line machinery was
already tooled when the defect was discovered. Ford Motor Company rushed the Pinto into production anyway. Finally in
1977 new models incorporated a few minor alterations necessary to meet new federal standards that Ford had managed
to hold off for eight years.
PROPOSED SAFER
LOCATION

BEHIND-THE-AXLE DESIGN

The players
Arjay Miller
President of the Ford Motor Company in the mid-1960s
Involved in an accident in which his Continental burst into flames upon impact
In 1965, recounted his incident to the U.S. Senate, and passionately called for better control over fuelfed fires in auto accidents

Robert McNamara
President of Ford Motor Company in 1960 who eventually became the Secretary of Defense.
Champion of cost/benefit analysis
Because of his strong business background, he held cost/benefit analysis higher than anything else,
even human life.

J.C. Echold
Director of Automotive Safety (essentially an anti-safety lobbyist)
Wrote a memorandum to the Department of Transportation that in effect says that even though a fix
exists for $11 per car, it is still acceptable for 360 people to die or get injured by fire each year.
Turns out neither of these facts are true. A bladder that cost $5.08 was developed by Goodyear was
tested by Ford two times before the memo was ever sent. The bladder was shown to be effective.

The ethical issues

Cost/Benefit analysis out of business realm
For pure business decisions that have no effect on human life, the cost/benefit
analysis is an effective tool
Applying the cost/benefit to issues in which human life is involved is an ethical
dilemma must put a value on human life.
The auto industry didnt want to be so brazen as to come up with a figure
themselves, so they pressured the NHTSA to decide on a figure.

Lobbying the government

Because of Robert McNamaras influence on government, Ford had gotten
federal regulators to agree to talk auto safety in terms of cost/benefit analysis.
J.C. Echold used this mindset to lobby the government to agree that human
lives arent worth saving for a few dollars per car.

Section III Protagonists actions compared to NPSE Code of Ethics

Arjay Miller, Ford

Motor Co.
President, 1963
Member of the
Board of Directors
1962 - 1969

The Whiz Kids, 1946 -Group of US Army Air

Force veterans that
produced two
presidents and six vicepresidents for Ford
Motor and ended
decades of unprofitable
business for the Ford
Motor Company and
became one of the
most celebrated
success stories in all of
American business.1

Robert McNamara, Ford Motor Co.

President, 1960 Secretary of
Defense for the United States
1960-1968 - - advocate of CostBenefit
Analysis
Lee Iacocca,
Ford
Motor Co.
President, 1970-1978 Developer
of the Ford Mustang and later
President of Chrysler

http://www.automotivehalloffame.org/inductee/arjay-miller/726/ - accessed December 1, 2015.

Where did Ford Executives act unethically?

1. Hold paramount the safety, health, and welfare of the public
Ford engineers estimated that technical improvements to the fuel system would cost
about $11 per vehicle (or 0.55% of the sale price of $2000).
Benefits
180 burn deaths at $200,000 per death
180 serious burn injuries at $67,000 per injury
2, 100 burned vehicles at $700 per vehicle
Total Benefit -- $49.5 Million
Costs
11 million cars at $11 per car
1.5 million light trucks at $11 per truck
Total Costs -- $137.5 Million
$88 Million Dollars made the decision
50 lawsuits were filed against Ford between 1971 and 1978. In one case a jury
awarded the plaintiff $125 million in punitive damages against Ford (Award was
reduced
by judge
toin
$3.5
Million).
Does this
represent
a flaw
logic
as well as ethics? Was the unethical choice truly a
cost savings?
Ford has always rejected that the Pinto was unsafe when compared with other cars of
its type
Ford consistently
stated
the Pinto
consistently
government
standards
They neglected
to state that
thethat
company
lobbied
heavily exceeded
with success
to delay adoption
of
newassociated
crash standards
These
lobbying costs are also outside the scope of the Cost-Benefit Analysis
justifying the decisions made by Ford
Moral Issues in Business, 8th ed. Shaw & Barry (pp83-86).

3. Issue public statements only in an objective and truthful manner

While truthfulness is debatable, Ford statements failed to meet an objective and
truthful condition
Ford executives acted under the Cost-Benefit Analysis to preserve the best interests of
company
objectivity
disclosure
the antithesis of these interests
4. Acttheir
for each
employer
or clientand
as full
faithful
agentswere
or trustees
Would a stronger lobby by Ford engineers toward fixing the fuel tank issues have been
more faithful to their employers in the long run?
5. Avoid deceptive acts
While Ford motor was never held criminally liable, the Pinto Fuel Tank problems have
become a poster-child for corporations valuing profits over public safety. The car
buying public and press saw Ford actions as untrustworthy.
6. Conduct themselves honorably, responsibly, ethically, and lawfully so as to enhance the
honor, reputation, and
usefulness of the profession
The Pinto became a national joke, mocked by comedians and parodied in movies which
did little to enhance Ford Motors reputation

Pinto Madness Mother Jones 2(8) (Sept/Oct 1977) by Mark Dowie