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A Brief Guide to Ethical Theories and Principles
Ethical Paper 1 · Ethical Paper 3 · Ethical Paper 4
Introduction:
In the late 1960's the Ford Motor Company, then headed by Lee Iacocca, was under pressure to design a subcompact automobile in order to compete with foreign automakers and an increasing demand for more fuel efficient automobiles by the American public. As was the policy of the time, instead of allowing the engineering teams to take the customary three and one-half years to bring a new vehicle into production, corporate management decided to take on the task of designing a new subcompact, the Pinto, weighing less than 2,000 pounds and selling for less than $2,000, in a little more than two years. Within this shorter time frame, styling took precedence therefore engineering design was considered less crucial. The conventional engineering design of the time was to place for the gas tank was between the rear axle and the bumper. The mistake that had not been foreseen was that previously full size American automobiles were fitted with full length frames that the bodies were bolted to and the crash bumpers were then bolted to the frame. This conventional design in most moderate impacts prevented the fuel tank from being ruptured by the differential in the event of a rear end collision because the frame of the vehicle acted as a crumple zone preventing the fuel tank from ever contacting the rear differential in a rear end collision in a read wheel propelled vehicle. The engineering flaw inherent in the Pinto was that the car due to its size lacked a full frame as previously made American vehicles. Ford was attempting to create a uni-body construction as was being done by foreign vehicles of the time. The unforeseen mistake in the design of the Pinto was that in the event of a rear end collision the rear end of the vehicle acted as the crumple zone allowing the gas tank to be driven clear up to the differential housing butting against exposed bolt heads that would puncture the gas tank in the event of a rear end collision. In the event of the collision the sheet metal would separate opening the rear portion of the passenger compartment. Raw fuel would now slosh out of the ruptured fuel tank into the now open passenger compartment and would ignite within seconds of impact. I was actually a witness to one of these accidents on a suburban street and had to pull two people out to safety from one of these vehicles.
Stakeholders:
The stakeholders in this case would include the entire general public, all people involved in the automobile accident, those in the Pinto and those that collided with the Pinto, firefighters, emergency crews, police, automobile insurance companies, hospital emergency room staff around the country, Ford as a corporate entity, the executive board of Ford Motor Company, the employees of Ford Motor Company, and the shareholders of Ford Motor company.
Technical Issues:
In pre-production testing, Ford found that the gas tank was likely to leak and possibly burst into flames when it is struck from behind. Internal documents showed that eleven tests averaging thirty one miles per hour had been performed before the Pinto went into production. In three of the eleven tests the fuel tank did not rupture. In one test, a plastic wiffle ball was placed between the front of the gas tank and the differential housing so that the differential bolts would not rupture the fuel tank. In the next successful test, a piece of steel was placed between the fuel tank and the bumper. In the third test, the fuel tank was lined with a rubber liner similar to the arrangement used by race cars of the time. Ford was fully aware that fuel tank rupture was likely to happen. Corporate management decided to go ahead with this design because the assembly line machinery tooling was already prepared and corporate management concluded that it was not cost effective to add an $11 per vehicle design improvement to the Pinto's manufacturing cost to remedy the design flaw.
Ethical Issues:
The ethical issue in this case was whether a corporation only has a legal responsibility to meet government safety guidelines for its products or does it also have a moral responsibility and obligation to see to the welfare and safety of the consumers of their product regardless if the net overall effect results in a less than favorable product price point and subsequent reduced profit margin to the stockholders.
Analysis:
Ford contention at the time was the Pinto met all applicable federal government safety standards at the time. This is the first ethical flaw in Ford's argument which is Ethical Relativism. Ford claimed that because we are meeting current safety guidelines we do not have to go above and beyond those guidelines in upholding the public's safety. This is a weak argument because it rules out Ford Motor Company's responsibility to produce a product that is safe within normal operating conditions. I.E., the operators of these vehicles were not in any way violating the intended use of the product.
The second flaw in Ford's argument was on the basis of Egoism. Corporate management at Ford was taking the view that based on economics and by utilizing a cost benefit analysis that paying out $49.15 million in burn deaths, burn injuries and property loss was substantially less than the $137 million that would be required in ensuring that the entire Ford product line would have the new safety feature. In addition, along the same line of reasoning, it was Ford's belief that in a car that was only costing $2000 on the showroom floor the consumer would not be willing to pay the extra cost of an additional safety feature. The weakness in Ford's argument was that the company as a separate entity did not have to do what was in the interest of the general public and was not in the company's self-interest.
Third, Ford had fallen into the trap of 20th century thinking in using the argument of Nihilism. They were not interpreting Divine Law, but moreover interpreting Federal Law and ignoring Divine Law. Ford was arguing from the standpoint that we are meeting Federal guidelines and we have no ethical responsibility to the consumer beyond that point.
Fourth, Ford also had fallen into the weak argument of Moral Objectivism in assigning human life and suffering a dollar figure. Ford was being guided by the claim that there was an objective ethical standard that could be followed in settling law suits that would inevitably be created by its own negligence. Even though it is a weak stand on Ford's part, the sad truth is that this is the way most cases of this nature are handled. The lawyers take into account the age of the person, their possible wage earning capacity before the accident, all hospital expenses, funeral expenses, pain and suffering expenses and life long care expenses in the case that the person is no longer able to work or care for themselves and draw a dollar value of that particular person's life. Obviously, Ford was gambling that based on the cost benefit analysis that it would cost less to pay for the injuries and fatalities incurred in using their product versus re-engineering the vehicles to exceed government regulations of the time. J.C. Echold, director of automotive safety for ford, issued a study entitled "Fatalities Associated with Crash Induced Fuel Leakage and Fires." This study claimed that the costs of improving the design ($11 per vehicle) outweighed its social benefits. A memorandum attached to the report described the costs and benefits in this way:
The estimate of the number of deaths, injuries, and damage to vehicles was based on statistical studies. The $200,000 for the loss of a human life was based on a national Highway Traffic Safety administration study, which estimated social costs of a death in this way:
Recommendations:
Based on ten years of professional experience in the Import Aftermarket Automotive Parts Industry within the marketing department, I am going to assume a thirty percent profit margin at a minimum, was a necessity in making the necessary design changes be passed on to the consumer. Using these figures, $11 x 30% would have resulted in net increase of $33.10 per vehicle to hit the showroom floor. Even at 100% profit, the net increase of the vehicle would have been $110 per vehicle which could have been easily justified by utilizing an advertising campaign to the effect that Ford was exceeding Federal Safety Standards in all of its vehicles through improved fuel tank design. My recommendation would have been to have made the engineering change and to have used the engineering change as a new selling feature, thereby turning a negative into a positive.
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