Ford Pinto Case Files
Case Study of the Ford Pinto Fires The existing prestigious Ford Motor Company has been in business centuries. Ford is known as a worldwide leader in automotive technology, automotive-related products and motor vehicle services. Over the last 20 years the company has been venturing into newer industries such as aerospace, communications, and financial services. Discussing in detail the Ford Pinto fires Team D agrees that the Ford Motor Company’s main focus in the 70’s was to gain profit and be competitive with the foreign market.
With the pressures of Lee Iacocca to be competitive in these markets he came up with a plan to put a car into production that weighed fewer than 2,000 pounds and that would cost the consumer fewer than $2,000. Production of the Ford Pinto began in 1971 and sold before safety tests were complete, which results in the company discovering a default with the vehicles gas tank. While driving a 1973 Ford Pinto in 1978, three young teenage girls in Indiana died in an automobile accident when a van hit the car in the rear and causing the fuel tank to rupture from the impact and the car burst into flames severely burning the driver and passengers.
The discovery after extensive research by the company was that the cost of lawsuits would compare diminutive to the cost of the adding a new part of the Ford Pinto in production, so there were no recalls. Starting the recall of the Ford Pinto by the Ford Motor Company began in1978, after the death of six people between June 9, 1978, and September 15, 1978, and the filing of the first criminal charges on an American Corporation. The jury in the criminal case did not find the company guilty of criminal charges.
Deciding to stop the production of the Ford Pinto was a decision made by the Ford Motor company in 1980. Playing major roles in making decisions regarding the Ford Pinto were two people Lee Iacocca and Dennis Giola. Lee Iacocca was instrumental during that time because he was an up- and-coming executive that struck gold with previous models and thus wanting to stay with the pack in developing a compact car. For standard purposes, it was a well proven method of three years to develop and produce a model for the public, but he was able to have the production down to two years to stay with the competition.
Discovering the first mistake and the issues with the Ford Pinto, it was too late and too costly to fix what was thought to be a small issue. Dennis Giola was the man in charge of the recall department and did not react quickly enough when it was brought to his attention about the failure of the gas tank in slow rear-impact collisions. His department after a cost analysis found that it made more sense to ignore the problem because the profits were going to outweigh the liabilities by triple the amount.
The product decision in regard to the Ford Pinto was a simple $11 part that could result in saving lives if added to the production of the vehicle. Determining through cost analysis it was not cost effective to replace the defective part and the risk of not replacing the part only costs a third of what profits Ford was projecting to make on the sale of the cars. In determining the costs of replacing the defective part, through a series of calculations on how much a human cost if the defect were to cause deaths. Relying on statistics in regard to the safety of vehicles is one of the most backward ideas that a person can ever consider.
One cannot put a price on a human life and assume it would work in maintaining an image. Proving it would have been more cost effective to recall the vehicles earlier. Fords mission and vision in 2011, refers to Ford as “One. ” ONE Ford, ONE Team, ONE Plan, and ONE Goal are Fords way of striving to bring consumers back and to regain the trust of its customer’s. If this mission had been in place in the 1970’s Ford would be a different company. As the company strives to make a profit and improve the value of its product, Ford will not lose sight of its important asset, the consumer.
Ford continues to develop new products to the satisfaction of the consumers and will ensure the safety, quality, and sustainability of its product, unlike the Ford Pinto. The Ford Pinto was the opposite of its mission statement focusing on making a profit and reducing the cost to make a vehicle and ignoring the safety of its consumers and damaging its reputation. Applying the new 2011 mission statement in the 1970’s with today’s values, perhaps remembering the Ford Pinto as an iconic vehicle than a scandal. (“Our Mission and Vision,” 2011).
The mission statement of Ford today is improving its products and services while meeting the needs of the customers, allowing the company to prosper as a business and to provide a generous return on investments for stockholders and the owners of the company. As the company continues to strive to improve, make a profit, and constantly enhance the value of its product, and learning a valuable lesson. The Ford Company is committing to developing a line of new products satisfying the needs and wants of the consumer.
The accident drew more national media attention than any other auto maker in the country. Prosecutors were accusing Ford of reckless homicide and ask the court to make the Ford Motor Company responsible for the deaths of those who lost their lives in rear end collisions. Filing the case in court was the first time an American corporation was brought up on charges of criminal conduct. The prosecution was seeking charges of murder not negligence and for the courts to apply stiffer penalties greater than any other in the United States history.
Proposing in 1968 that the completing tests by the National Highway Traffic Safety Administration and following the guidelines of the Federal Motor Vehicle Safety Standard 301. Adopting this legislation in 1977 provides the Ford Pinto with a new fuel tank design that was rupture proof. Stopping production of the Ford Pinto by the Ford Motor Company took place in 1980. In conclusion, applying the new mission statement of the Ford Motor Company it is accomplishing much regaining of the trust of the consumers who purchase Fords.
Ford is focusing on the future and even though it is a company that wants profits, it is putting the consumer’s wants, needs, and safety first. It has begun to build a better image for its production of vehicles and is still competitive with other foreign markets and acquiring profits for the company and its shareholders. According to (Degeorge, 2010), Ford crash tests reveal the company was aware of the fuel tanks defects. The team agrees that Ford did not do the right thing to prevent these tragedies from happening.
It is a mistake that will haunt Ford forever, because of this mistake vehicle safety regulations are changing and new legislation is protecting the whistle-blowers who report such incidents. References DeGeorge, R. T. (2010). Business ethics (7th ed. ). Upper Saddle River, NJ: Prentice Hall. Trevino, L. K. , & Nelson, K. A. (2007). Managing business ethics: Straight talk about how to do it right (4th ed. ). Hoboken, NJ: John Wiley & Sons, Inc. Our Mission and Vision. (2011). Retrieved from http://corporate. ford. com/our-company/our- company-news/our-company-news-detail/one-ford