Ford Pinto -- Case Analysis on August Case Study

Ford Pinto -- Case Analysis

On August 10, 1978 a group composed of three young women, two were eighteen and one was sixteen, were the subject of a rear end automobile accident by another vehicle while driving in a 1973 Ford Pinto (Epstein, 1980). The car was engulfed in flames due to an explosion in the gas tank of the car and the three young women lost their lives in a horrific manner. This represents one example of a trend that was recognized to be associated with the Ford Pinto manufactured during a range of production years. The design of the Pinto was arguably constructed with a faulty fuel system that caused the case tank to explode on a rear end collision in the car.

It has also been argued that Ford actually had sufficient evidence that the design was a problem before so many people lost their lives. Ford had actually conducted a cost benefit analysis that factored items such as the cost of fixing the fuel system problem on existing cars compared to the estimated legal costs associated with the lawsuits that were directed at Ford due to the unneeded loss of human life. The part that was identified that could have rectified the design flaw was a relatively inexpensive part that was in the neighborhood of ten dollars or less. Ford decided that it would be more advantageous for them financially to run the risks associated with legal settlements than it would be to retrofit the poorly designed fuel systems.

Discussion

The Ford Pinto case serves as a classical example of how financial considerations can sometimes overcome the considerations of what would generally be considered to be ethical behaviors. For example, Ford did not exactly consider the costs of human life. Instead they tried to estimate the costs that the company would incur as a result of the lawsuits that would be placed against Ford. From a strictly financial position, this actually makes a great deal of sense.It would be difficult to try to determine what the value of a life would be exactly. The value of a life is a rather abstract concept that is incredibly debatable. However, an estimate of the legal fees and the settlement payments could be based on some historical data from previous examples of similar cases. Thus in a sense, it is easy to imagine how someone could come to such a decision based on a financial estimates.

However, it is intuitively an unethical decision that was made on the behalf of the Ford Motor Company. Beyond intuition however it requires a great deal of contemplation to determine exactly why Ford's actions were unethical and this is by no means cut and dry. There are several ethical principles that can be applied to Ford's decisions. Furthermore, these principles can be weighted in a wide array of different ways. One classical consideration that is common in such cases is at what point does self-interest or financial considerations become superseded by ethical principles. In today's financial economy that is extremely competitive, manufactures are constantly tempted to cut corners or find other ways to maximize their productivity to stay ahead the competing firms.

The role of ethics in business should be focused on just that point. Ethics should provide the boundaries of acceptable and unacceptable behaviors and decisions. However, these boundaries are often in conflict with what would be the deemed the most financially prosperous route for the company to take. In the Ford case, although there calculation were incorrect in the end, initially the company felt….....