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Ford Pinto Case

By Silja and Ellen and Nathan

Their course of action was completely egoistical, for they decided to risk millions of lives instead of investing in a secure fuel system.

Their means were to save money instead of creating a secure and good product.

Six month following the controversial Grimshaw verdict, Ford was involved in yet another controversial case involving the Pinto. The automobile's fuel system design contributed (whether or not it was the sole cause is arguable) to the death of three women on August 10, 1918 when their car was hit by another vehicle traveling at a relatively low speed by a man driving with open beer bottles, marijuana, caffeine pills and capsules of "speed."4 The fact that Ford had chosen earlier not to upgrade the fuel system design became an issue of public debate as a result of this case. The debate was heightened because the prosecutor of Elkart County, Indiana chose to prosecute Ford for reckless homicide and criminal recklessness.

http://philosophia.uncg.edu/phi361-metivier/module-2-why-does-business-need-ethics/case-the-ford-pinto/

https://users.wfu.edu/palmitar/Law&Valuation/Papers/1999/Leggett-pinto.html

https://en.wikipedia.org/wiki/Ford_Pinto

In May 1972, Lily Gray was traveling with thirteen year old Richard Grimshaw in a 1972 Pinto when their car was struck by another car traveling approximately thirty miles per hour. The impact ignited a fire in the Pinto which killed Lily Gray and left Richard Grimshaw with devastating injuries. A judgment was rendered against Ford and the jury awarded the Gray family $560,000 and Matthew Grimshaw $2.5 million in compensatory damages. The surprise came when the jury awarded $125 million in punitive damages as well. This was subsequently reduced to $3.5 million.

Between 1971 and 1978, the Pinto was responsible for a number of fire-related deaths. Ford puts the figure at 23; its critics say the figure is closer to 500. According to the sworn testimony of Ford engineers, 95 percent of the fatalities would have survived if Ford had located the fuel tank over the axle (as it had done on its Capri automobiles).

Some felt the issues raised in the Ford Pinto cases were an example of the "deep pocket" company disregarding consumer safety in pursuit of the almighty dollar. Others feel they are an example of runaway media coverage blowing a story out of proportion.5 Regardless of opinion, the Ford Pinto case is a tangled web of many complex legal and ethical issues.

Costs

Sales: 11 million cars, 1.5 million light trucks

Unit cost: $11 per car, $11 per truck

Total cost: 12.5 million X $11 = $137.5 million

To determine if the proper result was achieved in this case, one has to evaluate and weigh these many issues. The central issue in deciding whether Ford should be liable for electing not to redesign a defective product in order to maximize its bottom line, one must analyze the so-called "cost/benefit" analysis Ford used to defend this decision. Within the scope of this paper, this cost/benefit issue (and associated sub-issues) will be the focus of discussion. Other issues, such as the ethics involved in Ford's decision, the choice of prosecuting Ford criminally, whistle-blowing, the assignment of punitive damages and the Court of Appeals decision reducing the damages are all important issues of this case that will not be the focus herein.

Benefits

Savings: 180 burn deaths, 180 serious burn injuries, 2,100 burned vehicles

Unit cost: $200,000 per death, $67,000 per injury, $700 per vehicle

Total benefit: (180 X $200,000) + (180 X $67,000) + (2,100 X $700) = $49.5 million

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