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Ethics in Business January 31, 2007

Posted by wilson7 in Auto's, Consumers, transportation.

In chapter two of our book it deals a lot with Ethics, this topic related to the Ford Pinto case that I read in Business Government & Society. In 1970, the Ford officials had to confront a difficult decision either delay production of the new Ford Pinto or continue as scheduled. The problem with the Pinto was the design of the gas tank, which failed 8 out of 11test trails (the 3 that passed the test all had modifications to the gas tank). The company decided to do a cost-benefit analysis to determine if it was worth the wait. This analysis determined that a person killed in a gas tank accident was worth $200,000, a person injured was worth $67,000, and vehicles burned $700. How is a company able to put a price on a human life? Is this fair to the families of these people? Anyway, Officials estimated that there would be 180 burned deaths, 180 burned injuries, and 2,100 burned vehicles thus totaling $49.5 million. On the other hand to fix the gas tank it would cost $11 per car and truck, there were 11 million cars and 1.5 million trucks totaling 137.5 million. The Ford officials decided to continue as schedule in the belief that the delay of the new automobile would cost the company more money than the lives that they put in danger. How do you think this situation worked out? 

Aristotle said that deciding what is the best ethical course is not easy. Reasonable people will disagree on what is right. The ultimate, overreaching questions are: What is an ethical company and to what extent should law require ethics? 

Did the Officials for Ford make the right ethical decision? I do not believe so; they put a car with defects on the road knowing that people would be seriously injured maybe even killed. They decided that making money was more important than human life. How many companies do you think are like this around the world? Is there 1, 100’s, 1000’s? A consumer would never know, only the members of that organization. Should there be laws that prevent this type of unethical behavior? I do not think this can be regulated by the government but only in the minds and hearts of the producer. Officials have to determine what is more important a quick buck or the death of several innocent people. Between 1971 and 1978 there were 700-2,500 deaths with fires involving the Ford Pinto and 100’s of millions of dollars in lawsuits. So was it worth it?




1. collage9 - January 31, 2007

I completely agree with you in this situation and think that Ford made a poor decision in continuing their current production of the Ford Pinto. I think the value of human life should have greatly outwieghed pressure from within the company to produce the Pinto when the decision was being made. Ford officials used very poor judgement here and should have definitely taken action to fix the problems they were having with the Pinto.

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