Pinto - Ford Motor Company Case Study

Pinto Fires

The Facts

In the 1970’s, the Ford Motor Company launched a new car, which was Pinto, to compete with European cars and Japanese cars. The early model of Pinto had been detected a faults in the Pinto fuel tanks from the crash test, it indicated that the Pinto had a recallable problem that can be directly connected to customer’s safety issues. However, the Ford Motor Company did not recall Pinto and kept producing a car without adjusting production plan for competitive price of product. The reason was that Ford calculated that the costs of a lawsuit for car’s deficiencies were cheaper than the costs of redesigning the tank and its location. The company operated purely for gain, but it did not consider consumer safety. This decision led that many had fallen victim to the Ford Motor Company due to a defective fuel system. Ford made a decision to not spend $11 per car to repair the defects in the Pinto fuel tanks that brought many fatal accidents. As a result, Ford was arraigned on a charge of reckless homicide and ordered to pay damages to accidents victims. Also, the company lost their credibility and brand value. The case represents when a leader of organization made unethical management, it can lead societal damage, and an organization can get financial damage and a reputation suffers.

Ethical Issues

Ford’s non-action to change the flaw of the gas tanks generated dead persons that it was immoral. Even though the firm already knew that Pinto was inherently flawed, but left the situation as it is. Consequentially, the result of Ford’s decision caused fatalities and it could not contribute any social contribution. Regardless of consequence, the decision-making was not ethical since the firm only focused on their benefits. Under utilitarianism, Ford could not get the greatest happiness of the greatest number. The customers, shareholders, the Americans, and automobile industry got damaged. John Rawls emphasized the importance of qualified fairness, however, Ford’s decision-making was more likely to the high-handedness of big corporation. Even behind a veil of ignorance, the firm’s decision is clearly unethical.

Ethics and the Law

        The case of Pinto fires demonstrates the relationship between the law and business ethics. There were guidelines related to safety regulation, which was Federal Motor Vehicle Safety Standard 301 (FMVSS 301) by the National Highway Traffic Safety Administration (NHTSA) in 1968, however, FMVSS 301 was not actually adopted at the time of test. For this reason, Ford did not break the law regarding the decision, which did not redesign in the Pinto gas tanks, but the result of accidents was legal problem. Legally, the decision that Ford manufactured Pinto without redesigning gas tanks was a just right to do business. From an ethical standpoint, the company did not consider socially responsible action and customers’ safety issues. The decision gave more weight to financial value than human life. It was not ethical business. It means that even though there is intersection portion, the law is not ethics.