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Professionalism/The Ford Pinto Gas Tank Controversy

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The Ford Pinto was an American subcompact car produced from 1971 to 1980. It was developed as Ford's entry into the small car marketplace. Pressures from foreign competition and the looming rise in gas prices incentivized Ford’s upper management to cut the Pinto’s delivery time in half. Promises of a light and cheap car were made to entice potential customers.[1] Ford’s engineers designed the Pinto with these requirements in mind, using lightweight, flimsy materials to cut costs. The rushed delivery schedule resulted in component layout choices which further compromised the vehicle’s safety. Testing exposed a gas tank puncture risk in rear-end collisions, resulting in car fires.[2] Ford continued to push the production pace without publishing its test results. Over the Pinto’s nine year production service, rear-end crash burn fatalities ranged from 27 to 180. [1] Grimshaw v. Ford Motor Co. exposed Ford’s risk-benefit analysis, the company’s reasoning to withhold a recall. Cases against Ford continued throughout the 1970’s until the manufacturer issued a voluntary recall in 1978. [3]

Background

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Ford Pinto

Subcompact cars entered the American automotive marketplace in the 1960's. At this time many families began to purchase multiple vehicles. Smaller cars made ideal secondary options because of their inexpensive costs.[4] The early subcompact market was dominated by foreign manufacturers such as Volkswagen and Toyota. These companies had more experience producing economical cars than their American counterparts. High gas prices, narrow roads, and population dense areas in mid-20th century Europe and Japan required foreign brands to design more fuel-efficient, compact models. [5] Foreign imports also had exceptional marketing campaigns to secure grounding within the American market. Volkswagen's "Think small" initiative increased sales of its Beetle, and the Toyota Corolla's advertised low price appealed to middle class customers.[6][7] The rise of subcompact foreign imports and the steady increase in gas prices prompted a response from American automotive companies. In 1968, Ford's President, Lee Iacocca, introduced the Pinto. This car was Ford's attempt to obtain a respectable share in the subcompact market. Iacocca set the Pinto's delivery date to 25 months, cutting the typical delivery time nearly in half. He also stressed that the car must be under 2000 lbs and cost less than $2000.[8] Ford's chairman, Henry Ford II, expressed his support of the Pinto in a 1970 Chicago Tribune article, expecting "the introduction of new domestic subcompact cars, such as the Ford Pinto, to reverse the steady growth in the imported share of the United States Market".[9]


Design Flaw

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The Pinto controversy centered on a single design flaw which made this “carefree car” a potential deathtrap. Ford engineers chose to place the fuel tank at the back of the car, directly between the rear bumper and rear axle. This fuel tank placement was common for domestic and foreign cars at the time, and was considered a conservative choice compared to the untested above-axle design. However, the potential dangers of this placement were exacerbated by other decisions made in the design process. Due to Iacocca's cost constraints, the walls of the fuel tank were exceptionally thin. The fuel tank design also incorporated four poorly arranged bolts, which protruded from the rear differential directly adjacent to the tank. [2] Rear-end collision tests showed that, in collisions over 25 mph, the protruding bolts punctured the thin walls of the fuel tank, resulting in fuel leakage. Sparks into this leakage had a high chance of ignition, culminating in fatal consequences.

While this flaw was discovered during testing, the short time frame of the Pinto’s development meant that final tooling had already begun.[8] Ford did not deem the fuel leakage as a major design flaw, because they did not undertake any retooling efforts. Harley Copp, a lead Ford test engineer, was a whistle blower during the Pinto's testing phase. In the later trials, he claimed the Pinto was "grossly inadequate and the weakest I've seen in cars for the last 10 to 12 years". [10]

Grimshaw v. Ford Motor Co.

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In May of 1972, Lily Gray was driving a 1972 Ford Pinto with a thirteen year old passenger, Richard Grimshaw. While driving, the car stalled and was then rear-ended. Upon impact, the Pinto's fuel tank ruptured, leaking fuel which then ignited. The Pinto caught fire, burning Gray to death and leaving Grimshaw with severe injuries. The families sued Ford Motor Company, and in 1978 the jury awarded them over $125 million in damages, though it was later reduced to $3.5 million by the judge[11]. The trial itself was closely covered by the media and surrounded by rumors and misinterpreted facts. The most notable of these is the document that came to be known as the “Pinto Memo”

The Pinto Memo and Its Risk-Benefit Analysis

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The Pinto Memo included a cost-benefit analysis, weighing the cost of an $11 per car fix against the cost of settling cases including death or injury. The breakdown of the risk-benefit analysis is as follows:

Benefit:

Burn Deaths Burn Injuries Burn Vehicles
Savings 180 180 2100
Unit Cost $200,000 $67,000 $700
Sub-Totals $36,000,000 $12,060,000 $1,470,000
Total Cost $49 million

Risks:

Car Sales Light Truck Sales
Sales 11,000,000 1,500,000
Unit Cost $11 $11
Sub-Totals $121,000,000 $16,500,000
Total Cost $137 million

After the release of the memo, critics of Ford found several points of contention with Ford’s risk-benefit analysis. For starters, while calculating the benefits, Ford claimed that the incidence of burn injuries would equal the incidence of burn deaths. In reality, experts say that the ratio between burn injuries to burn deaths would be a much larger 10:1.[12] If Ford had estimated the incidence of burn injuries to be 1800, ten times greater than the incidence of burn deaths, then the total cost of the benefit would have risen to $158 million, trumping the total cost of the risk. As a result, Ford’s risk-benefit analysis would have indicated that it would be more cost effective for Ford to make changes to the Pinto’s fuel tank.

Additionally, Ford received flak for their low value of the human life. The National Highway Traffic Safety Administration (NHTSA) suggested that Ford use $275,000, a relatively low estimate considering that most other federal agencies at the time had set the value of human life at $350,000. Ford, however, ignored both of these estimates and chose a much lower value of human life: $200,000.[13] By choosing such a low valuation of a human life, Ford consciously cut the apparent benefits of fixing the car, eliminating the burden of implementing changes to the fuel tank.

Finally, critics also faulted Ford for inflating the unit cost of the repair, claiming that it would cost $11 per vehicle. At the time, several third-party companies had proposed quick and cheap fixes to Ford. For instance, Goodyear proposed a rubber bladder that would completely encase the fuel tank, preventing leakage in the event of a fuel tank rupture.[14] The total cost of this fix would have been less than $5. Ford, however, disregarded these solutions and stuck with their hefty estimate of $11. This inflation of the unit cost consequently inflated the total cost of the risks.

Thus, if Ford had heightened the likeliness of burn injuries occurring, had increased their value for human life, and had used a cheaper unit cost of the repair fix, then Ford's risk-benefit analysis would have indicated that it would be more cost effective to implement the repairs than to risk human life. While each of these individual critiques irked the public, what ultimately led to the heavy media coverage and public outcry was Ford's valuation of human life in its risk-benefit calculations. Prior to the release of the Pinto memo in the Grimshaw v. Ford Motor Co. lawsuit, the public was predominantly unaware of the widespread use of life valuation in cost analysis - companies typically kept this practice under wraps. When this practice was revealed, the American public was shocked by its morbid nature. After all, is not human life priceless? Ultimately, the Pinto memo instigated the debate over the assignment of a dollar value to the human life.

While the controversy behind the use of the value of human life in risk-benefit analysis still persists, it has become not only a common practice but an expected practice. In fact, most federal agencies actually require companies to carry out risk-benefit analysis using their predetermined values of human life. For instance, the Food and Drug Administration requires pharmaceutical companies to conduct risk-benefit analysis on the safety of their drugs; the Environmental Protection Agency requires chemical companies to conduct risk-benefit analysis on the extent of the effects of their air pollution. Today, the controversy surrounding its usage does not revolve around its ethical implications, but around the precise dollar amount assigned to the human life. The debate asks: how exactly we are to determine this monetary value? Are some lives worth more than others? Is the college graduate worth more than the high school drop-out?

Calculus of Negligence

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The calculus of negligence, also known as the hand rule, is a formula designed to determine whether a legal duty of care has been breached.

PL>B

In this formula, B is the burden(the cost of taking precautions to prevent a harmful outcome or loss), P is the probability of the harmful outcome, and L is the financial magnitude of the loss. If the probability of a loss multiplied by the magnitude of the loss is higher than the cost required to prevent the loss, one is required to take the necessary actions to prevent the loss.[15]

The precedent of using the calculus of negligence as a legal standard was set in the ruling of United States v. Carroll Towing Co. in 1947. In this case, the United States had a load of flour aboard a barge, the Anna C., owned by Connors Marine Company. When employees of the Carroll Towing company were moving barges on a pier in the New York Harbor, the Anna C. broke loose and sank, dumping the United States' cargo. The court ruled that Connors Marine Company was responsible in part, due to their absent barge attendant, who should have been on the Anna C. at the time of the accident. The preventative action that Connors should have taken(having the barge attendant on board) was decided to be less than the probability of the accident multiplied by the gravity of the accident. The probability of loss was considered high since it occurred in a busy harbor during wartime, and the magnitude of loss was very large.[15]

Further Backlash

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Future investigations would put Ford in hot water for their actions related to the Pinto. In 1974, Federal Motor Vehicle Safety Standard (FMVSS) 301, legislation that was intended to tighten the standards for fuel system integrity in accidents, was ready to be released. If this legislation passed, it would have necessitated a change in the Pinto design. Ford lobbied to delay this legislation and succeeded in delaying it for two years. Ford managers voted to delay a fix for new models until it was legally required.[16]

Not long after the Grimshaw case concluded, Ford was headed back to the courtroom. An Elkart County, Indiana public prosecutor charged Ford Motor Co. with reckless homicide and criminal recklessness after three women died when their Pinto was rear-ended on the freeway. Although the charges were dropped, this was the first time ever that a company faced criminal charges in a product liability case. This is certainly indicative of the public anger at Ford's seemingly callous attitude toward its customers' safety. In addition to the two higher profile cases, Ford faced over 117 lawsuits related to the rear-end accidents in the Pinto.[17]

NHTSA Investigation

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In April 1974, the Center for Auto Safety asked the National Highway Traffic Safety Administration (NHTSA) to issue a recall on the Ford Pinto to address the flaws in the fuel system design[18]. However, the NHTSA initially decided that there was not enough evidence to actually launch an investigation[18]. In August of 1977, Mother Jones published an article titled Pinto Madness which launched a number of accusations against Ford and the NHTSA. These included that Ford knew that the Pinto was wildly unsafe, and that they did not implement design changes due to their cost benefit analysis showing that it would be more profitable to simply pay for lawsuits and damages[16]. The next day, Ralph Nader and the article's author, Mark Dowie, held a press conference in Washington D.C. about the dangers of the Pinto's design flaws. Additionally, Nader and the Center for Auto Safety resubmitted their petition to the NHTSA[19]. The day after the press conference, August 11, the NHTSA began investigating the Pinto, and in May of 1978 concluded that the fuel system was defective. Soon after, the NHTSA scheduled a public hearing for that June and began negotiating with Ford to recall the vehicle[19].

It was noted that the NHTSA used an extreme and worst case test result to justify the recall. The test had multiple parameters set to maximize the damage and potential for fire. The majority of small cars available would have also failed the test. An NHTSA engineer later justified the decision with the rationale "Just because your friends get away with shoplifting, doesn't mean you should get away with it too."[20] In a later analysis of the NHTSA's decision, Lee and Ermann concluded that the NHTSA had a number of incentives to prove a defect existed in the fuel system. These included pressure from automotive safety groups such as the Center for Auto Safety, as well as the growing public outcry[20].

Recall

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Rather than wait for the public hearing, Ford agreed to do a voluntary recall on the Pinto on June 8, 1978[21]. In the end, Ford recalled over 1.5 million vehicles, which was the largest recall in automotive history at the time. Despite putting out a recall, Ford disagreed with the NHTSA's conclusion[20]. Instead, it maintained that the recall was simply to satisfy the public concerns resulting from the unjustified criticisms of the fuel system[22]. However, Ford did also mandate a number of modifications for each recalled vehicle, including inserting a protective shield between the fuel tank and the differential bolts, and a new fuel-tank that was more resistant to breaking during a rear-end collision[22].

The Ford Pinto Myth?

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The Ford Pinto is constantly brought up as an example of poor business ethics. However, later studies have made the claim that the case was a misunderstanding. In regards to the Pinto memo, the public was led to believe that this was an internal Ford document. In actuality, the memo was prepared for NHTSA crash investigations and used as a resource for other American car companies. In the Grimshaw court case, the defendants tried to use the document as a way to show Ford's lack of concern for safety. The judge ruled against admissibility, a fact not openly publicized by the media.[23] Public perception was also skewed by the Mother Jones article that first released the Ford Pinto memo. The article used emotional terms such as "firetrap", "death trap", and "lethal car" which built mistrust with Ford. The Mother Jones article also estimated that 500 to 900 persons were killed in fires attributed to the fuel tank design. This was followed by a 60 Minutes segment where they accused Ford of buying 2000 deaths and 10000 injuries because they wanted to build a cheaper car. However, a NHTSA study indicated that only 27 deaths and 24 nonfatal burn injuries were attributed to rear-end fuel tank leakages.[23] Although there was difference between public opinion and the NHTSA study, Ford executives still performed the risk-benefit analysis.

Analogous Cases

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The calculus of negligence, established by the United States v. Carroll Towing Co. in 1947, provides a way to correlate responsibility and negligence with financial burdens and losses.[15] There is much difficulty, however, in determining a cost value for a human life.

One such case can be observed with steelworkers in the 1970's. As of the mid-1970's about 30,000 Americans were subject to the fumes from the coal ovens in the steel making process. As a result, these workers were several times more likely to die from various forms of cancer. The Occupational Safety and Health Administration (OSHA) mandated steel companies to implement new safety devices and practices. Considering the cost to the industry and the predicted number of lives saved per year, it was estimated to cost the industry $4.5 million per each life saved. [24]

A similar case, in which people grappled with the value of human life, was the Willow Island Disaster in 1978, where a cooling tower collapsed and killed 51 construction workers. Immediately after the accident, federal safety officials pledged to take steps to prevent future construction accidents. Many years passed with no such regulations, however, as OSHA and the Reagan administration argued over the cash value of a human life. [25]

A more modern figure to challenge the traditional life valuation practices is Kenneth Feinberg. Feinberg is an attorney specializing in alternative dispute resolution, who has handled valuation and compensation for lives lost at the 9/11 attacks and the Virginia Tech shootings. In a 2008 interview, Feinberg recalls dealing with families of 9/11 victims, and having to explain why a firefighter's family would receive less public compensation than a banker's family. Several years later, in the wake of the Virginia Tech shootings, Feinberg encouraged a system where all victims' families would receive the same compensation.[26]

Ethical Take Away

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All career fields have a common rule emphasizing public safety.  In a perfect world, risk analysis and calculus of negligence would not exist.  The question of “What is a life worth?” would be changed to “Is this safe?”  It is the duty of engineers to create inventions or solve problems to satisfy the general public.  One should not have to worry about getting injured.  However, modern technologies used incorrectly can cause harm.  As such, it is up to engineers to greatly reduce the risks of harm.  This case could have avoided many calamities if the engineers held themselves this code.

References

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  1. ↑ a b Wojdyla, B. (2011). The Top Automotive Engineering Failures: The Ford Pinto Fuel Tanks. Popular Mechanics, 20. http://www.popularmechanics.com/cars/a6700/top-automotive-engineering-failures-ford-pinto-fuel-tanks/
  2. ↑ a b Leggett, C. (1999). The Ford pinto case: the valuation of life as it applies to the negligence-efficiency argument. Law and Valuation Papers.https://users.wfu.edu/palmitar/Law&Valuation/Papers/1999/Leggett-pinto.html
  3. ↑ Kramer, L. (1979). Recall Asked of a Million Ford Autos: Ford is Asked to Recall, Fix Million Autos. The Washington Post. https://search.proquest.com/docview/147044512
  4. ↑ The D&S Collective. (1974). Shifting to Small Cars? Dollars&Sense. http://www.dollarsandsense.org/archives/1974/0574smallcars.html
  5. ↑ Mostafavi, H. A. (1985). A Statistical evaluation of factors affecting Japanese penetration into the United States automobile market. https://search.proquest.com/docview/303323094
  6. ↑ Grose, J. (2013). See a Brief Cultural History of an Auto Giant: The Volkswagen Beetle. Fast Company. https://www.fastcompany.com/1682699/see-a-brief-cultural-history-of-an-auto-giant-the-volkswagen-beetle
  7. ↑ Bodevin, L., Cox, S., Nguyen, T., Setianugraha, R., n.d., While Detroit Slept: How Toyata Invaded the American Car Market. http://www.mcafee.cc/Classes/BEM106/Papers/UTexas/351/Toyota.pdf
  8. ↑ a b Birsch, D., & Fielder, J. (1994). The ford pinto case: a study in applied ethics, business, and technology. Albany: State Univeresity of New York Press.
  9. ↑ Mateja, J. (1970). Auto Industry is 'Remarkable' in Spite of Recession: Ford: Auto Trade Remarkable, Ford Asserts. The Chicago Tribune https://search.proquest.com/docview/169878665
  10. ↑ Fritz, K. (1980) Ford Decided to Save $6.65 per Car Rather than Redesign, Pinto Trial Told. Washington Post. https://search.proquest.com/docview/147313470
  11. ↑ Legget, C. (1999). The ford pinto case: the valuation of life as it applies to the negligence-efficiency argument . Retrieved from http://www.wfu.edu/~palmitar/Law&Valuation/Papers/1999/Leggett-pinto.html
  12. ↑ Birsch, D. & Fielder, J.H. The Ford Pinto Case. Albany, NY: The State University of New York Press. Retrieved from http://books.google.com/books?id=qIlPURPTx30C&pg=PA29&lpg=PA29&dq=Andrew+McGuire+ford+pinto+burn+injuries&source=bl&ots=z-PrAx1rng&sig=hAHxQe8eHGl2NVgSL5Rsf44B6tE&hl=en&ei=vde6TYjBDJG5tgewzKC0BQ&sa=X&oi=book_result&ct=result&resnum=1&ved=0CBwQ6AEwAA#v=onepage&q=Andrew%20McGuire%20ford%20pinto%20burn%20injuries&f=false
  13. ↑ SafetyXChange Staff (2008). Cost-Benefit Analysis: The Ford Pinto Example. Retrieved from http://www.safetyxchange.org/tools/cost-benefit-analysis-the-ford-pinto-example
  14. ↑ Samuel, A. & Weir, J. (1999). Introduction to Engineering Design. Burlington, MA: Elsevier Butterworth-Heinemann. Retrieved from http://books.google.com/books?id=xxuyvQR34O4C&pg=PA347&dq=ford+pinto+goodyear+bladder&hl=en&ei=adi6TeL9M8bcgQeN16TdBg&sa=X&oi=book_result&ct=result&resnum=3&ved=0CGsQ6AEwAg#v=onepage&q=ford%20pinto%20goodyear%20bladder&f=false
  15. ↑ a b c Feldman, Allan & Kim, Jeonghyun. (October 1, 2005). The Hand Rule and United States v. Carroll Towing Co. Reconsidered. American Law and Economics Review.https://academic.oup.com/aler/article/7/2/523/154621/The-Hand-Rule-and-United-States-v-Carroll-Towing
  16. ↑ a b Dowie, Mark (September/October, 1977). "Pinto Madness". Mother Jones,. {{cite web}}: Check date values in: |date= (help)CS1 maint: extra punctuation (link)
  17. ↑ Sherefkin, Robert (June 16, 2003). "Lee Iacocca's Pinto: A fiery failure". Automotive News.
  18. ↑ a b Graham, John D. (1991). Huber, Peter W.; Litan, Robert E., eds. "Does liability promote the safety of motor vehicles?". The Liability Maze: The Impact of Liability Rules on Innovation and Safety. Washington DC: Brookings Institution: 132.
  19. ↑ a b Dardis, Rachel; Zent, Claudia.(1982)The Economics of the Pinto Recall. The Journal of Consumer Affairs
  20. ↑ a b c Lee, M., & Ermann, M. (1999). Pinto "Madness" as a Flawed Landmark Narrative: An Organizational and Network Analysis. Social Problems, 46(1), 30-47. doi:10.2307/3097160
  21. ↑ Danley, J. (2005). Polishing up the Pinto: Legal Liability, Moral Blame, and Risk. Business Ethics Quarterly, 15(2), 205-236. doi:10.5840/beq200515211
  22. ↑ a b Jones, William H. (June 10, 1978). "Ford Recalls 1.5 Million Small Cars. Ford Recalls 1.5 Million Pintos, Bobcats, Pintos, Bobcats Face Alteration to Cut Fire Risk" The Washington Post
  23. ↑ a b Schwartz, G.T. (1990). The myth of the Ford Pinto case. Rutgers Law Review, 43, 1013-1068.
  24. ↑ Hornblower, Margot. (1976, Nov 29). Placing dollar-and-cent value on life. The Washington Post. https://search.proquest.com/docview/146584366
  25. ↑ Earley, Pete. (1985, Jun 09). WHAT'S A LIFE WORTH? The Washington Post. https://search.proquest.com/docview/138560653
  26. ↑ Allison, Jay. (May 25, 2008). What is the Value of a Human Life? National Public Radio.http://www.npr.org/templates/story/story.php?storyId=90760725
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