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In the early 1970s, Ford was rushing to design its Pinto model automobile to capture the entry-level car market. Whereas the typical development cycle for new automobiles was then nearly four years, Ford had condensed that time to approximately one half as long, partly by omitting various safety tests or by executing them contemporaneously with other production and design steps to safe time and capture the 1971 market. The Pinto was purposely designed as a very small vehicle to comply with directions and design specifications issued by the top level of management to produce a vehicle that weighed less than 2,000 pounds and that cost less than $2,000, the approximate equivalent of $11,000 in today's dollar value.
By the time the model was ready for rollout, Ford engineers had already identified a serious and potentially deadly problem with the Pinto's design. Specifically, because of its very compact size and the positioning of the gas tank to maximize trunk space, there was insufficient space to protect the gas tank from being ruptured in rear-end crashes of 30 miles per hour or greater. Ford's tests proved that the gas tank was extremely vulnerable and that it would likely result in deadly fires in many ordinary rear-end collisions in situations where the collisions themselves would not necessarily have caused significant bodily injury or deaths to occupants of the vehicle. Ford's tests also determined that the gas tanks could be protected by the installation of a simple part that would have cost the company $11 per vehicle. To make matters even worse, Ford was also aware that rear-end collisions typically caused the Pinto's doors to malfunction and become inoperable, sealing occupants inside the vehicles to burn to death when their cars caught fire.
Because the applicable government safety tests had been changed to include rear-end crashes only after the Pinto was already in production, the company was not under any statutory obligation to meet the new government standards. The company calculated the price of recalling the Pinto and of installing the $11 part on all 12.5 million affected vehicles at $137 million. It also calculated the total monetary cost of paying out the damage awards to the owners of 2,100 Pintos statistically likely to be involved in burns from crashes (including approximately 180 injuries from burns and 180 deaths from burns) and determined that the total cost of compensating the victims of the design defect would be less than $50 million. As a result of the decision to value corporate profits over human lives and welfare, hundreds of people died horrific deaths and hundreds more suffered painful and debilitating injuries and disabilities. Today, the decision by the company to value corporate profits over human lives and welfare stands as a model of bad corporate ethics and ethical decision making in business organizations.
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