Issues of the Ford Pinto

3197 words (13 pages) Essay in Management

23/09/19 Management Reference this

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                                                   The Case of The Ford Pinto

 The Ford Pinto has had a long history. Did you know that the very first Ford Pinto was launched in the American automotive industry back in September 11, 1970?[1] The 70’s Ford executive, Lee Iacocca, wanted to create a Ford vehicle that would be under $2,000 while weighing under 2,000 pounds total.[1] So, in 1971, Lee Iacocca made an order to create the Pinto in efforts that the Ford vehicle would be able to enter into showrooms around the world.[1] Soon after, the Pinto became very popular in America. But, there were major issues regarding this case in point. Throughout this study, I am going to briefly explain what issues occurred during the modeling, tests and the showcase of the Ford Pinto, if the flawed design should be left alone or be redesigned for the better, and what new possibilities could have been a better solution towards the design of the Pinto.

The competition between Japanese companies and the Ford business was a very intense one during the 1960’s. In efforts to win the battle, Ford wanted to hurry the production process in a subsidiary time frame than the essential time required. According to our e-course textbook, Ford cut the time frame down to just about three and a half years into two.[2] Ford was then able to invent a entirely new model in order that the new Pinto would not suffer any major issues and damages, but, Ford became lazy during their manufacturing process and went away with their decision to keep it as is. Ford underwent through various prototypes in order to know if the Pinto would be a safe car for operation by the National Highway Traffic Safety Administration, also known as, NHTSA.[2] This safety standard test was developed to decrease potential risks of fires from wrecks in traffic. This also was necessary that all recent cars, in 1972, would pass a rear-end crash test which was 20 miles per hour without losing any fuel and by the year of 1973, the cars would be able to pass a rear-end crash test of 30 miles per hour.[2] Around this time, all of the prototypes actually failed the rear-end 20 miles per hour crash test.[2] In 1970, the Pinto was tested by Ford with leaving no new or positive results, instead the gas tanks in the Pinto were fractured and there were many leaks present.[2] There were some Pintos that did pass the crash test, but those certain vehicles underwent through major adjustments prior, such as replacing the gas tank with a rubber-made bladder or importing a patch of steel in between the rear bumper and the gas tank. Prior to all of this happening, Ford already saw the consequences from a mile away, so they have to make a final conclusion. This conclusion is to either keep the model of the Pinto as it already is and being within the time frame of the car’s construction but having an unsafe vehicle or delay the creation of the car and instead remake the gas tank in order for the car to be a safer vehicle of consumers but waiting another full year in fighting the competition to other external businesses. Well, Ford decided to keep the model that was already invented for another six years total.[2] By this decision, there is evidence that showed that Ford depended on the welfare of costs down the road. Spending about eleven dollars trying to enhance the safety of the vehicle is not a bad price to pay for the improvements of every Pinto, especially if this would later decrease the number in deaths, but Ford had evidently already made up in their minds that the price was more important than the benefits of just developing a new tank for the car.

 So, in response to this case, I will now begin placing myself in the role as the CEO of Ford and say that Ford’s moral issues are completely out of balance. From my understanding of the case, Ford much rather that a life be taken away than to just make sure that a vehicle is safe for maneuvering on the highways. In other words, any amount of money can be in exchange for someone’s life. As CEO, Ford should not only just be worried about their interests and well-being, but also their consumers safety and security. After all, they are the ones who are obviously going to be operating their Pintos for daily transportation purposes. In order for the cost-benefit analysis to be effective, it all must be for a common cause. No matter the excuse, money is not more important than risking someone’s life as a result. No matter how long it takes, Ford needs to make sure that all of their vehicles, not just some, have been safely manufactured and passing all safety crash tests. Another solution could be for Ford to create a safe and also very affordable subcompact car for their consumers. I have stated before that Ford already previously knew the consequences of continuing on with the production due to the competition that they were up against. If this was really soley about Ford’s reputation, paying the eleven dollars would have probably taken an major effect on this case. But, who in their right mind would purchase a vehicle that could potentially take their life or even their families lives? Looking at it this way, makes me think that Ford purposely wants to endanger their potential customers lives. In my eyes, the Ford company are lawbreakers. Milton Friedman’s thesis of his argument concerning the business’ social responsibility states, “There is one and only one social responsibility of business-to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud”.[3] The rules of his thesis should not be left out. Part of it means that you should not do things that may cause any harm to other people. Another part means that businesses must perform in ways which allows the business to work, but cannot engage in any fraudulent activity.[3] Friedman’s thesis helps forbid businesses from doing things that would perhaps, in the long run, ruin them. Therefore, Ford did not take out the time to make morally correct decisions and most importantly, Ford did not take into effect that by doing this that their reputation as a major car company in America can be crooked.

My role as CEO of Ford Company, I would have to be responsible for making sure that each and every vehicle that is produced is indeed a safe investment and as far as the company goes, I will have to protect the earnings of my business and all of the decisions that must be made as it will show how morally and ethically responsible of a CEO I really am. What would a smart CEO have done in this situation? I would a planning strategy for Ford in order to set better goals while also researching what did not work out well in the past few years regarding our car models. Hopefully, this will help Ford to generate more profits, if done correctly. With my decision, there cannot be any major or horrific risks in expected returns. Even though we are in a major competition with other outside motor companies, such as Japan, I will make sure that our vehicles that we manufacture and sell are customer worthy and safety and honesty always comes first. I do not want any of our consumers having to worry about whether our automobiles are safe, made from excellent materials or mechanical parts and not to mention the Ford Motor Company’s reputation in the mix. One thing that must not be ignored for any motor vehicle company is realizing the risks that could possibly endanger your customers and even you. I would make sure that every Ford vehicle is thoroughly inspected, repaired and passing all safety procedures and tests by law. I would also make sure that our customers know about the mechanical issues in order to keep them well informed, which will result in having a trusting relationship with both previous and new customers. I would also make sure that I, myself, am well educated in the production and selling of motor vehicles. Most women do not know much about cars, so if I was the CEO of a major automobile company, such as Ford, I would really have to do my research in order to stay as knowledgeable as I can. According to Milton Friedman’s justification for stockholder theory, the CEO plays at least two roles, the role of a citizen and the role as the CEO of a business.[4] In the role of a citizen, I would respond to the issues of this situation in a timely manner as I saw fit.[4] As the CEO of the business, I am also counted as an employee of the Ford Motor Company. Milton Friedman states that the CEO also answers to a boss, which is conglomeration of all stockholders within the company.[4] These kind of bosses expect to receive something back from the company’s profits. When each boss buys a certain amount of assets or property, they then want the CEO to use their capital in order to make the company more successful and generating more money for the stockholder.

Edward Freeman’s stakeholder theory thesis statement is as follows: “The basic idea is that businesses, and the executives who manage them, actually do and should create value for customers, suppliers, employees, communities, and financiers (or shareholders).”[5] In this particular case involving Ford Motor Vehicle Company, the stakeholders would be the product engineers, the employees of the company, the executive chair of management, the shareholders, their competition, the consumers, and the automobile safety officials. To begin with, there were issues with the executive chair of management because they decided to fight against the costs of repairing the motor vehicles rather than just making sure that the cars were safe to drive for consumers.[5] The company’s employees, engineers, and shareholders got money from the decisions being made from management by taking the moneymaking route. If they did not withstand the decision, the stakeholders who already knew about the issues regarding the vehicles, would also be responsible for what was bound to happen eventually.[5] The customers are very important in regard to being stakeholders. They are the very people who are purchasing your products. Ford gave their target market what they wanted, but their safety procedures were not strong enough to keep their customers protected. There are two perspectives to this situation, one involving the corporate workforce which is all about financial gain and the other, which shines a light on a more social viewpoint of life over money. Agreeing to put other people in harm’s way just for you to make a few bucks is a criminal offence no matter how you look at it. Most companies tend to get away with this crime various times, but this is the main problem in our society today. We say that a human life should be honored and then we come up with an money making approach that goes completely against giving a person the right to live their life without it being snatched away from them. This makes our jobs more important than our personal worth. In today’s world, I have always been told that business does not mix well with emotions. Businesses do not care about your personal affairs, your family or your difficult situations, it is all about what you can do for them and how you can make them look good in the public face. For example, the people who work for Ford’s Company care more about their lives of making money to support themselves and their families than their customers’ lives and their customers’ families. They also would not even think twice to even purchase the car for themselves. It is like every man is doing for himself. We need to show more social responsibility not just in our personal lives but also in our work life. The different courses of action to this case could be that while potentially making more money but not considering the safety issues would be an okay kind of action to make because more cheaper cars would be sold because of the car model which cancels out a small amount of deaths in contrast to people who do not ever have a car accident. Another course of action could be the percentage of customers who gain from the cars than the people who are killed by them. If it is important for everyone to live and not get hurt while driving these cars, the actions described above would hold no value to this situation whatsoever.

Should the defective Pinto be kept the same way it is? The risk/benefit analysis was used because the NHTSA made them use this method. If the cost of remodeling a vehicle had to take place, the risk/benefit method helps to defend Ford as long as if making the change would outweigh the society welfare. By Ford following this analysis, they already knew that they were not going to make any changes in their car. According to Ford’s numbers on the analysis, making the change would save 180 deaths and injuries caused by fires, and 2,100 of burned automobiles.[6] This information was then multiplied by the unit cost. The total societal benefits turned out to be a total number of 49.5 million dollars, which is less than 137 million dollars.[6] This showcased that it was okay, according to the numbers, for a total of 180 losing their lives and burning up if every vehicle would only cost them eleven dollars for each car.[6] So, in question, should the Pinto stay the same? Business-wise, yes, but with a disclaimer or some sort of caution notice attached to it would be better. Once again, instead of hiding this information from potential customers, as Ford’s CEO, I should make sure that this important information is open for the sake of my consumers well-being. Upon learning this information, if the consumer still wants to make a Pinto purchase, then it will be entirely in their hands. I have done my part in making sure that the consumer knows exactly what they are getting themselves into before agreeing to make a purchase.

Should the Ford model be redesigned? Yes, but it may cause the Pinto to not be as profitable in returns as it would if they kept it the same. The upside to this decision would be that the consumers would be able to have a safer automobile. Regardless of what the company wants, protecting the lives of the drivers and passengers of these cars remain top priority in my decision. Just looking at numbers and not thinking about any other parts that play into the decision making of the Ford Pinto vehicle is still not a smart business choice. Do not just only rely on numbers, but look at the full complete picture. Often times, a company must consider the well-being of the human race just like hospitals and the government and set higher standards, although this would fight against the risk/benefit analysis itself. In this way, the rights of certain people would not be taken away just for the selfish demands and wants of everyone else. My verdict would be that the Ford model should definitely be redesigned.

In closing, it would be an abusive thing to say that money is more important than someone’s life. This is why the case of the Ford Pinto took a major fall. Even though this was according to strict corporation policy rules, safety standards are still to be taken into serious consideration. The risk/benefit method was okay to begin with, but the final decision from it was not their best effort. Sacrificing the lives of others for your business financial gains is indeed a very selfish way to go about it and also lacks ethical reasoning in many ways. It is sad to say that dehumanizing still exists in our world today. If financial gain is the only thing that companies really care about, then we as consumers are just people who give away our hard earned money to these companies and practically being used in the process. We all should think twice and do all of our research before deciding to buy from a company who go against good character and moral decision making.

                                                              Works Cited

[1] Today in Engineering History: Ford Pinto Introduced

https://www.ecnmag.com/blog/2015/09/today-engineering-history-ford-pinto-introduced

[2] Case: The Ford P​into – phi 361:

https://learn.uncg.edu/courses/learn/phi361/module-2-why-does-business-need-ethics/case-the-ford-pinto/

[3] Understanding Friedman’s thesis – phi 361:

https://learn.uncg.edu/courses/learn/phi361/module-2-why-does-business-need-ethics/understanding-friedmans-thesis/

[3] Milton Friedman, “The Social Responsibility of Business is to Increase Its Profits.” In Ethical Theory and Business 8th Edition, ed. by Tom L. Beauchamp, Norman E. Bowie, and Denis G. Arnold (New Jersey: Pearson, 2009.), 55.

[4] Friedman’s Justification for Stockholder Theory – phi 361:

https://learn.uncg.edu/courses/learn/phi361/module-2-why-does-business-need-ethics/friedmans-justification-for-stockholder-theory/

[5] Freeman’s Stakeholder Theory – phi 361:

https://learn.uncg.edu/courses/learn/phi361/module-2-why-does-business-need-ethics/freemans-stakeholder-theory/

[5] R. Edward Freeman, “Managing for Stakeholders.” In Ethical Theory and Business 8th Edition, edited by Tom L. Beauchamp, Norman E. Bowie, and Denis G. Arnold (New Jersey: Pearson, 2009), 56.

[6] Case: The Ford P​into – phi 361:

https://learn.uncg.edu/courses/learn/phi361/module-2-why-does-business-need-ethics/case-the-ford-pinto/

[6] Moral Issues in Business 8th ed. Shaw & Barry (pp.83-86)

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