The Case of Ford Pinto: Corporate Ethics Issues

It is as certain as the sun rising, it’s going to happen. Everyone is going to face death at some point, it’s only a matter of time. If you drove a sub-compact car designed by Ford during the early 1970s, it may come sooner than you’d like. We often purchase vehicles as a matter of convenience, to help us get from one point to another, faster, and hopefully safer. Now, what if safety was a little out of reach and just what if, your life had a dollar amount that determined its worth? Well, it just happened that the car drove, set that equation into motion. Doesn’t this seem ethically or morally wrong? Ford Motor Company didn’t think so and skipped the care of ethics. Ultimately, Ford created just that, a pre-determined equation to determine the worth of human life. And the basis for establishing that shocking solution, to save a few bucks.

If you haven’t figured it out yet, we’re referring to the Ford Pinto. The infamous explosive car delivered by the Ford Motor Company to compete with foreign imports while combating rising fuel costs. One might think that safety is on the leading edge of motor vehicle designers and Chief Executives Officers (CEO) mind, not in this case, only the bottom line was. This belief can be compared to the ever-controversial theorist Milton Friedman. He believed that “there is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits” (Fox, 2012). Does this theory put safety and precautions second to profits? Can someone intentionally manufacture a product knowing that innocent, unknowing consumers may be at risk? One might wonder if the president (Lee Lacocca at the time) of Ford Motor Company believed and followed this ethical theory of Friedman’s. Since he approved and rushed the manufacture of the dreaded Pinto. It would appear that Lacocca had issues with the ethical dilemma surrounding the Pintos design and failure. In a leaked memo from Ford, the pinto suffered from a faulty design involving the fuel tank exploding in minor rear-end collisions while possibly jamming the doors shut, trapping its occupants inside. Hence, creating a crematorium on wheels. The car earned a nickname after dozens of people died, “Pinto leaves you with that warm feeling”. Despite this well-known flaw, production continued.

Included in that fault-finding memo was the cost and method to rectify the issue. An $11-13 plastic piece installed per vehicle (price varies by the article). Initially, it seems relatively low, but multiplying that figure by the number of cars in use and future production, that figure soared. Ford calculated a number that compares the cost associated with recalling and repairing the faulty Pintos or pay possible lawsuits filed by injured occupants or families of the deceased. Unfortunately for the Ford Pinto drivers and according to the “risk-benefit analysis” and Friedman’s theory, profit loss seemed too costly for repairs. Estimators at Ford figured that human life was worth about $200k, with an estimate that 1,000 people may perish in fiery crashes, to recall and repair the pinto just didn’t make sense financially. So, life is only worth a messily $200k? Well, that’s the idea and Lacocca went ahead with it.

Sadly, a time machine isn’t a thing of existences and we can’t somehow manipulate the mindset of Lacocca. If we could, I’d injected a revised theory of ethics that could alter his mindset regarding the Pinto and more importantly, human life. Using utilitarianism, for instance, this form of ethics “argues that ethical behavior consists of actions that create the greatest good for the largest number of people”. If we could go back in time, changing Lacocca’s decision to not produce the Pinto without altering the fuel tank flaw and reinforcing the overall construction would have proven less costly and created possibly a positive impact to the history of the car. But it is safe to say that Lacocca had an issue with ethics, his actions that choose to rush the manufacturing despite the issues led to the recall of 1.5 million Pintos (Eckhold, 1978) and jeopardizing the safety of his consumers. It’s fair to say that his choice was not in part with the greatest good.

Obviously seeing that Lacocca did not apply the best decision making choices, there could be some generalized legal topics that could show how this affair may have been influenced. Though properly administering codes of ethics, creating positive work environments with a reliable workforce, and advocating for future whistleblowers, are just a few to mention.

We hope that each business and its personnel, whether it be employees, supervisors, management and so on, are above the temptation of wrongdoing, deliberately. But regrettably, there are not. To counter this, many businesses have implemented a measurement tool, a code of ethics. This simple, yet effective “systematic procedure” helps protect yourself, products, businesses, and hopefully consumers. When adhering to a code of ethics, you probably need to ask yourself some of these questions if faced with a dilemma:

• Is this the right thing to do?
• Am I being loyal to my family, my company and myself?
• Have I been asked to misrepresent information or deviate from normal procedures?
• How would it look if it made the news or public knowledge?
• Is what I am doing going cause harm?

These mentioned are just some of the few questions that could be found regarding a code of ethics. One may ask themselves these when evaluating trouble; too bad Lacocca didn’t.

As a business owner, the importance of a reliable and ethical workforce is crucial. Looking back on the ’70s, some might think about the work environment during that period. The seventies were an age when strikes happened regularly. The desire to improve work conditions, boost job security, end gender restricted jobs, demand higher pay, all played an important part in creating a better workplace and generating strikes. These reasons and more could’ve lead to the need for skilled and reliable workers. Corporations like Ford may have chosen workers willing to do their job without hesitation and maybe without being forthcoming about potential issues. Hiring the wrong type of employee that might overlook a potential problem vs a member that mentions the issues before it grew out hand could have played an important role for Ford. This factor may have contributed to the ethical issues Lacocca and management.

A whistleblower is an “employee who brings wrongdoing by an employer or other employees to the attention of a government or law enforcement agency” (Legal Definition, n.d). The individual responsible for leaking the condemning memo regarding the Pinto to Mother Jones magazine can be viewed as a moral hero. When the designing of the Pinto took place, Ford engineers have the moral and ethical reasonability and responsibility to hold public safety paramount, exclusively when designing vehicles! There’s a plentiful archive of material addressing the issue and the consequences of their design, which sadly wasn’t known till after the fact and loss of lives. Production ran fully without much attention and scrutiny for its risk/benefit analysis until when the memo was released in August 1977. It wasn’t till the design flaw and widely criticized risk-benefit analysis were known, that Ford finally accepted responsibility and recalled their mistake. At this point, it was too late.

It’s easy to look back on history and pass judgment, the outcome is already known. We often develop different solutions toward problems or better ways to accomplish tasks, but at the moment it’s not always easy. We must rely on the moral background and ethical standpoint of our decisions to make the right choices. We must learn from our mistakes, rectify any damages the best we can, possess the intestinal fortitude, and to doing the right thing. I’m sure that Lee Lacocca and the designers look back on the Pinto and wish they had a second chance. That there was some way to reverse their decision that cost lives of hundreds and affected so many others, but unfortunately there isn’t. We can assume that Lacocca was trying to do the best he could at the time financially but failed in his ethical and moral judgement. Yet, for some money is not as important as life and well-being, for others it is. Like most things, it’s a part of history, which can’t be changed.

References

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