Ford’s Ethical Dilemma with the Ford Pinto
Cari Lyn Hansen
ORGL 3322
Behavior, Ethics and Leadership I
Americans began to transition away from big gas guzzling cars, in the late 1960’s, in
favor of subcompact cars with better gas mileage. Ford, Chevrolet, Pontiac, AMC, and
Volkswagen, all jockeyed for position of leader in this emerging market. Ford’s ethical
position relied heavily on their motivation to be the leader in this emerging small car
market. During this same period, the public began to demand more Corporate Social
Responsibility (CSR), for automakers to take reasonable precautions to minimize
personal harm in crashes. Regulations were becoming stricter for crash survivability.
Corporations were doing internal tests and trying to stay ahead of regulation. In an effort
to enter the new subcompact car market, both Ford and Chevy developed cars in about
half the time of the current industry standard. As a result both the Ford Pinto and the
Chevrolet Vega had significant design flaws. The Ford Pinto had multiple lawsuits
regarding its exploding gas tanks. The Chevrolet Vega quickly issued recalls to fix
defective axles, balky throttles, and problems that caused fires. Ford did not issue any
recalls until they were forced to in 1978. In this article I will analyze why Fords method
of handling, or more accurately ignoring, of the exploding Pinto gas tank showed very
poor moral judgement.
At the beginning of this emerging market, Ford's then-president Lee Iacocca decided
that his company would not sit idly by, as new Japanese competitors dominated the
small-car market. In 1968, Ford Motor Company began to make plans for a car that
would be inexpensive, small, and appeal to all car buyers. Ford believed that if they
could get a first time car buyer to purchase a Ford, they would be more likely to
purchase a Ford over any other brand for their future car purchases. With this in mind
Ford made preparations to produce the Ford Pinto, and by August 1968 the program
was underway.
When talking to a friend of mine who remembers the Ford Pinto, her immediate
response was: “Oh yeah, the exploding car! I knew someone who had a Ford Pinto.”
The propensity for the Ford Pintos poorly placed gas tank to explode on rear impact,
resulted in Fords advertising agency dropping the last line of an ad campaign that said,
“Pinto leaves you with that warm feeling.”
The issue of gas tank placement was in the stage of emerging issue maturity at this
point. Well over 90% of standard production cars at that time, had their gas tanks in the
same position as the Pinto. It was within standard business practices to position the gas
tank behind the axle in order to allow for more trunk space. However, in 1968 Larson v.
General Motors Corporation, began a new era of crashworthiness suits against
automobile manufacturers. Reasonable precautions now had to be taken by
automakers to minimize personal harm in crashes. The term Corporate Social
Responsibility became popular in the 1960s and continues to be, a term used by many
to cover legal and moral responsibility.
Prior to the development of the Pinto, the National Highway Traffic Safety
Administration (NHTSA) regulations only involved fuel system integrity for front end
collisions. Days after the Pinto was released, the NHTSA came out with more strict
regulations for post-crash survivability. The NHTSA strengthened requirements for a
front end collision, but they also added requirements for rear end collisions (being able
to withstand a 20 mph rear-end impact without losing fuel), lateral collisions, and
rollovers. The Pinto 1973 model only met the NHTSA requirement for 1969, but Ford
was not required to observe the new NHTSA standards because they had already
began producing the Pinto before the new safety standards were issued.
If Ford had adapted the Pinto, to meet the new 20 mph rear-end impact standard
without losing fuel, it would have meant redesigning the entire rear end of the car.
Because of the required redesign, and the fact that Ford already had $200 million worth
of tools in place, an adoption of these new standard would have caused a financial
disaster to Ford.
In an era where subcompact cars were gaining in popularity, Ford had rushed to join in
the niche market. Instead of the typical new car cycle of 43 months from inception to
production, the Pinto was produced in just 25 months after its inception. 25 months was
an unheard of record in its time and is still impressive in today’s market. This rush to
produce the Pinto, as well as Fords plan to follow the 2,000/2,000 rule, (keeping the car
weight under 2,000 pounds, and the cost under $2,000), led to cutting corners and
serious flaws. These flaws include the unsafe position of the gas tank, the frequent
jamming of Pinto doors when rear ended, and the fairly inevitable leaking and ignition of
gas upon rear impact.
The Ford Capri (1969), came out 2 years earlier than the Ford Pinto (1971), and
according to internal Ford tests on the Capri, it was known that mounting the gas tank
over the axle was much safer than behind the axle as early as 1971. The decision to put
the gas tank behind the axel in the Pinto, came from wanting to offer consumers a
larger trunk space uninhibited by putting the gas tank over the axle. Another factor the
engineers took into consideration for the Pinto, was positioning the gas tank as far away
from the front of the car as possible.
Records show that Ford first conducted rear-end collision tests on the Pinto in
December of 1970. This was months after it was already in production. Eleven carefully
coordinated crashes were tested. Eight out of the eleven vehicles suffered potentially
catastrophic gas tank ruptures. The only three that did not have gas tank ruptures, had
been modified before the test to protect the tanks. In the three tests that did not result
in fires, the three cars each had a different prototype safety device that engineers had
developed while working with suppliers. Engineering teams also proposed borrowing
the design Ford already used in its Capri, with a tank that sat above the axle and out of
the way.
The most effective prototype was the use of a rubber bladder/liner produced by the
Goodyear Tire and Rubber Company. Despite rupturing the exterior of the tank, no fuel
was spilled, and no fire resulted. The unit cost of bladders was estimated to amount to
$5.08 per car.
The second prototype tested, was an extra steel plate attached just behind the rear
bumper, isolating the tank from direct contact during impact. This plate successfully
warded off a blow at 30 mph, helping to keep the tank unbroken. No company cost
analysis was done at the time, but experts estimated this part could have cost up to $11
to install per car.
I’ll go into details of the third prototype a little later on in this article. Before I give you the
details of the third prototype, I want to explain in better detail the problems with the Ford
Pintos gas tank position.
In the 1973 Pinto, the gas tank was a mere nine inches from the rear axle. This might
not seem like a big deal, but there were other aspects of the Pinto design that caused
this to be deadly. On the rear axle transfer case, which takes the rotation of the drive
shaft and converts its power to the rear wheels, were bolts that stuck out facing the rear
bumper of the vehicle. When the Pinto was rear ended, the gas tank would be forced up
to the rear axle, and the transfer case bolts would perforate the gas tank. The fuel filler
pipe was also poorly designed and could easily become detached in a rear end
collision. This caused gasoline to spill over the ground, which was the cause of the
numerous large fires responsible for killing people. One report later described the entire
contents of a gas tank gushing out in less than a minute after an accident. The gas tank
also had a tendency to explode when leaked fuel met an ignition source. Another small
design flaw was the rear bumper attached to the Pinto. Usually bumpers are connected
to the car chassis, or something with strength, and they can provide a small degree of
protection. The Pinto’s bumper was only decorative and provided zero protection. In a
rear end collision, the Pinto would crumple completely. This allowed the car rear ending
the Pinto to reach the rear axle, crushing the gas tank into the axle, and everything in
between. Explosion of the gas tank usually occurred at any collision at or above thirty
one miles per hour. The doors on the Pinto had a proclivity to jammed shut when rear
ended at high speeds, causing the victims to be burned alive if they were not already
killed on impact. Without question the worst post-crash hazard is fire. Even if the victims
somehow survive the ordeal, they will be burned and most likely disfigured for life.
Engineers found that the majority of the ruptures were caused by two factors: 1) the fuel
filler pipe falling off and allowing fuel to drain out, where it could be exposed to an
ignition source; and 2) the tank being perforated by contact with the mounting bolts on
the rear axle transfer case and the right shock absorber.
This is where a third successful fix that was devised comes into play. A simple plastic
insulator fitted on the differential of the rear axle that would keep the bolts from ever
making contact with the fuel tank. The cost of this item was less than $1 per vehicle. It
would have been so simple and inexpensive to save hundreds of lives.
In today's environment, measures unquestionably would have been taken to reduce
fatalities and improve safety. But at the time, Ford management's attitude was to get the
product out the door as fast as possible. A considerable amount of our moral
perspective is driven by what is socially, morally acceptable. It takes a strong person to
say that the socially acceptable standard is not good enough. To recognize and give
voice to our internal moral views in a manner to elicit change takes courage and
commitment. So, Ford did a Cost/Benefit analysis calculation. While there are many
cases where a cost benefit analysis are supported, it is important heed internal moral
values and fully weigh the impact of decisions.
Ford used the Cost/Benefit analysis to justify their actions in not recalling all of the
Pinto’s from 1971 to 1976. This analysis weighed both the cost and the benefit to
society, and to Ford Motor Company if they were to recall every car that was defective.
When the numbers appeared to be in Ford’s favor, that is, the cost outweighed the
societal benefit, Ford felt justified in not recalling the Pinto’s, because they would be
spending more money than what would affect society. Fords conclusion, not to correct
the gas tank malfunction, is a textbook case of Utilitarianism. At the time, NHTSA
valued a human life to be worth about $200,000 based on the following terms:
Future productivity losses = Direct: $132,000 and Indirect: $41,300,
Medical Costs = Hospital: $700 and Other: $425,
Property Damage = $1,500,
Insurance Administration = $4,700,
Legal and Court Fees = $3,000,
Employer Losses = $1,000,
Victim’s pain and suffering = $10,000,
Funeral = $900,
Assets = $5,000,
Miscellaneous = $200.
The total value of human life per fatality was $200,725. Rounding the number down,
Ford came up with their Cost/Benefit analysis. The benefits accounted for 180 burn
deaths prevented, 180 serious burn injuries prevented, and 2,100 burned vehicles
prevented. If those numbers are multiplied for $200,000 per death, $67,000 per injury,
and $700 per vehicle, the final benefit, or amount of money Ford would have to pay
society, if they did not recall any of their vehicles, was $49.5 million.
The Cost analysis for the recall of Fords Vehicles includes 11 million cars, 1.5 million
light trucks. Recalling would cost $11 per car, and $11 per truck. After the math was
done, Ford would end up spending $137 million on recalls. So the fix was ignored, and
the Pinto went into production in September of 1970.
By 1974, the NHTSA began investigating complaints of failing fuel tank straps, and the
generally hazardous build quality of the Pinto. Ford and its industry associates actively
lobbied effectively to delay NHTSA regulation for rear-end crash survivability by eight
years. The NHTSA didn't really crack down on regulations until a 1977 article in Mother
Jones exposed the Pinto's fire danger and Ford's internal documents showing the
company knew of the potential problem.
Ford turned its back on moral norms valuing human life, in favor of data driven decision
making valuing profit. While data is definitely a valuable resource in the decision making
process, it should not be the only basis for a decision. Ford ended up spending millions,
fighting and paying off lawsuits in and out of court. These lawsuits were over their gas
tank malfunctions which severely damaged their reputation and sustainability. One
lawsuit was Grimshaw v. Ford Motor Company. Another such lawsuit involved three
teenagers from Elkhart County, Indiana.
In 1977 a court in Orange County, Calif., awarded $125 million in damages to Richard
Grimshaw, who'd been injured in a low-speed accident when his Pinto burst into flames.
The penalty was later reduced to $3.5 million. The initial figure of $125 was intended to
emphasize punishment for negligence, it exceeded all profits Ford had made on the
Pinto program. The hoped for lesson of Corporate Social Responsibility did not appear
to stick with Ford.
In 1978 the Ford Motor Company was indicted by a grand jury in Elkhart County,
Indiana for the deaths of three teenage girls. The charges were of “reckless homicide
and criminal recklessness”, major factors included the poor design and corporate
negligence regarding the girl’s deaths in the fiery crash of a Pinto automobile. The
Elkhart County grand jury pointed out that Ford knew the fuel tanks were unsafe in the
1973 Pinto. In the which, Judy Ulrich, 18; her sister Lynn, 16, of Oseola, Ind.; and their
cousin, Donna Ulrich, 18, of Roanoke, Ill. Died Aug. 10, 1978. This case raises several
questions regarding conventional business practices of the time, as well as, individual
ethical dilemmas for Fords leaders, managers and engineers. Elkhart County rightly felt
Ford had been reckless and irresponsible with their prior knowledge of faulty gas tanks
in the Ford Pintos. Ford maintained that the Pinto was as safe as any other subcompact
car on the road, and adhered to all the current laws and regulations of Indiana. Ford
also proclaimed that the engineers deemed the Pinto as “a good, safe car and bought it
for themselves and their families.”
I am astounded that having performed and recorded the rear-end impact tests that the
engineers would have somehow deemed the Pinto as “a good, safe car and bought it
for themselves and their families.” The engineers, managers and leaders at Ford would
have done well to mix some “doing what is right despite the consequences” (Kant’s
Categorical Imperative), “building healthy relationships through moral example”
(Confucianism), and some “concern for others” (Altruism), in with their perspective of
“do the greatest good for the greatest number of people” (Utilitarianism). Ford focused
too much on a Utilitarianism perspective. They focused on gaining market share of the
small car market insuring employment (both direct and indirect) and shareholder value.
The fact that all eight cars tested without modifications to the gas tank suffered
potentially catastrophic gas tank ruptures, and that the doors tended to jam upon high
speed impact trapping the victims inside gives you have a recipe for quickly getting rid
of customers through death and sullied reputation.
As stated earlier, Ford justified not recalling their affected vehicles because the amount
of money they would have had to spend on recalls far outweighed the amount of money
they would have had to spend on compensation to customers for death, injury, or
harmed cars. This instance of organizational politics theoretically saved Ford Motor
Company a great amount of money, however, they also forfeited their good reputation
and many devoted consumers because of their choice not to recall the cars. This was a
result of Fords failure to calculate the true cost by not including loss of brand image.
Ford originally gave four reasons why they did not want to recall the Pinto. 1) Ford had
based an earlier advertising campaign around safety, which failed. 2) The bad publicity
involved with a recall was felt be too much negative publicity to overcome. 3) At the time
of the product designs and crash tests, the law did not require them to redesign the fuel
system. 4) It was customary in the automotive industry to place the gas tank between
the rear axle and bumper.
Ford tried to persuade the Elkhart grand jury that according to their Cost/Benefit
analysis it was not socially beneficial to make minor changes to the gas tank (adding a
steel plate behind the rear bumper, without mentioning the possible protective bladder
or a simple plastic insulator). Ford served their own needs and interests by avoiding
breaking rules backed by punishment. This view point demonstrated Preconventional
Moral Development on the part of Ford leadership and lawyers.
During the 20-week trial, Judge Harold R. Staffeldt advised the jury that Ford should be
convicted of reckless homicide, if it were shown that the company had engaged in
“plain, conscious and unjustifiable disregard of harm that might result (from its actions)
and the disregard involves substantial deviation from acceptable standards of conduct.”
“Acceptable standards” was the key phrase that the trial revolved around. In the end,
Ford was able to prove that they had not done anything illegal, and had followed
industry standards.
Even though moral choices may supersede current standards of acceptable practice,
Ford was found not guilty of criminal homicide in the Elkhart County case of the Ulrich
cousins on March 13, 1980. The Pinto met all federal, state, and local safety standard
and was comparable to other 1973 subcompact cars. Also, in regard to the Ulrich case,
Highway 33, the location of the accident, was poorly designed, and the teenagers were
fully stopped when a 4,000 pound van rammed into the rear of the girls Pinto running at
least 50 miles per hour. Realistically, any car would have been destroyed in the same
circumstance. However, NHTSA ordered Ford to recall the Pinto and Ford did
everything as quickly as they could. The Ford Motor Company bowed to federal
pressure June 10, 1978 and recalled 1.5 million Pintos and Mercury Bobcats for
modifications on the fuel tanks. They sent out the recall notices on August 22, 1978.
The company said it would install plastic shields around the tanks, and filler pipe
extensions to reduce the hazard of gas tank explosions. But Ford officials maintained
that the recall was not an admission that anything was wrong with the cars. The fact that
NHTSA ordered a recall of Pinto, but not other subcompact cars is telling of the severity
of the Pintos gas tank malfunction.
Following the lawsuit from Elkhart, Indiana, Fords lawyers are quoted as saying “We’ll
never go to a jury again. Not in a fire case. Juries are just too sentimental. They see
those charred remains and forget the evidence. No sir, we’ll settle.” This quote
illustrates to me how misaligned the corporate moral compass of Ford leaders,
managers and lawyers was.
The most detrimental result of these lawsuits for Ford was the PR catastrophe. The
company experienced a lasting reputation for putting profits ahead of building quality
vehicles. The Pinto was an excruciating lesson for Ford, which now consistently builds
some of the safest cars on the road.
I believe the engineers were negligent to rush the Pinto from inception to production in a
mere 25 months when the industry average was 43 months. Their willingness to rush
production tells me they most likely suffered from: putting unanimous agreement ahead
of reasoned problem solving (group-think), and members accumulating and using
informal power to achieve personal and/or organizational objectives (organizational
politics). Because Ford claimed safety to be important, but ignored the catastrophic rear
end test results, I place the engineers, managers and leaders in the Preconventional
stage of Moral Development. Knowing the results of the 11 crash-tests for the Pinto and
having worked on solutions, I am inclined to believe that the engineers fell prey to group
members publicly express their support for decisions they privately opposed
(Mismanaged agreement).
The numbers used in Fords Cost/ Benefit analysis were not entirely accurate due to a
variety of misinformation. According to Mother Jones, the cost per car was really $5.08
cents to install a gas bladder according to confidential internal Ford documents, and
there was another potential fix that would have cost less than $1 per car. Also the
number of burn deaths was in dispute, along with the argument that “All independent
experts estimate that for each person who dies by an auto fire, many more are left with
charred hands faces and limbs.” A new proposed ratio of burn injuries to deaths of 10:1
was significantly different from Fords ratio of burn injuries to deaths of 1:1. Using correct
data would have significantly changed the numbers of the Cost/Benefit analysis
(increasing burn injury payout by $108.5 million) and would have also dramatically
tipped the scale away from Fords favor. Using the 10:1 ratio of burn injuries to deaths,
would have increased the final benefit paid to society to $158 million versus $137 million
to be spent on recalls.
The effects of Ford management’s decision, and the engineer’s decision not to correct
the rushed, faulty design of the Pinto are long lasting. I highly doubt this was the type of
sustainability Ford had in mind when it introduced the Pinto and fought for the right to
continue manufacturing the “exploding cars” until 1977. In 1977, NHTSA mandated that
all cars going forward had to conform to their requirements. Ford held off on alterations
for the NHTSA standards in the 1975 and 1976 Pintos due to the extra money they
would have had to spend to achieve the requirements.
Without question the worst post-crash hazard is fire. With this in mind Ford could have
integrated any of the three modifications their engineers came up with coordinating with
suppliers that proved effective in the 1973 rear end crash tests. Ford also could have
used the superior gas tank design they held the patent for and used in the Ford Capri
(1969).
If Ford had not decided to rush production and cut corners of the Pinto they could have
implemented any number of changes to the gas tank and/or rear-end design, when they
realized the catastrophic placement and design for the rear-end of the Pinto, with less
financial impact. The Pinto would not have been released before the new regulations for
rear-end impact post-crash survivability passed into law.
Alternatively, Ford could have shown moral courage and delayed production once they
saw the staggering failure of their rear-end collision tests. Ford also had the option to
voluntarily recall their faulty products, offer consumers an “upgrade” to improve the
safety of the vehicles, or even raise basic awareness with a disclaimer stating the
danger, along with the prevalence in the current industry of the gas tank placement.
Ford was doing internal tests for higher standards than was current regulation, but
struggled with developing its ability to address the variety of needs those tests
illuminated. Because of this I would categorize Fords level of Organizational Citizenship
as Engaged.
The ethical dilemmas faced by individual contributors/followers and mid-level leaders at
Ford include followership challenge of obligation to be a team player for Ford. The
challenge of obedience to Fords orders and directives to rush the development of the
Pinto and proceed with the faulty gas tank because it met with current industry
standards. The challenge of dissent regarding how to raise concerns in a meaningful
manner and to whom those concerns should be raised. The lack of moral action taken
by Fords individual contributors/followers and mid-level leaders tells me they were at the
Preconventional Level of Moral Development.
As a leader at Ford I would meet with upper level management and lead engineers to
determine and integrate a series of ethical and production checkpoints. I would strive to
apply a balanced mixture of Utilitarianism, Kant’s Categorical Imperative, Rawls’s
Justice as Fairness, Confucianism, and Altruism. Doing my best to keep the company’s
interest in mind without sacrificing sustainability and good reputation. In making
decisions I would defend universal ethical principles, strive to be well informed, look for
alternative options or acceptable compromises and implement the best option available.
I would allocate resources to developing higher corporate safety standards than the
NHTSA and valuing life as more than just mere data.
As a result of analyzing this case, I learned that there is a difference between complying
with the legalities of an issue as opposed to doing what is right, moral, and ethical in a
given situation. From observing Ford's then-president Lee Iacocca’s pressure to
produce a car in nearly half the time of the industry standard, and the corporate decision
to ignore the catastrophic rear end collision tests, I see a leader has an immense
impact. This impact is on an organizations behavior through social norms, code of
ethics, mission statement and core ideology. I’m amazed at how misaligned agreement
encourages people to take greater risks than they would as individuals. All said and
done, Ford most definitely should have had the moral courage to fix the Pinto from the
beginning instead of irresponsibly continuing to manufacture the exploding cars and put
them on the road.
http://fordpintoethics.webs.com/
http://archives.chicagotribune.com/1978/09/14/page/1/article/jury-indicts-ford-in-3-pintodeaths
http://www.popularmechanics.com/cars/a6700/top-automotive-engineering-failures-fordpinto-fuel-tanks/