The Way Ford Motor Company to Sell all Types of Cars

Kevin Nguyen Professor Tabesh 2/17/19 The car industry was accelerating so quickly that some automotive makers could not keep up. Ford’s plan was to dominate the automotive industry by selling every type of car, from compact cars to sporty cars, at an affordable price. Ford saw that they had a foot in almost every market except the small car market. So, to combat this lack of representation by the automotive powerhouse, Ford began to develop and produce the Ford Pinto. In 1971, the Ford Motor Company introduced its one-of-a-kind Ford Pinto. Consumers lost their minds when the Ford Motor Company revealed that they were going to release a cheaper and more lightweight car. Even though Ford promised their customers a lighter and more affordable car, the rise in the price of gas and high competition led the company to push for an earlier release. However, the push for an earlier release date came with a big price tag.

Ford essentially cut corners by producing fuel with very thin walls. In addition to being poorly designed, these tanks were also prone to causing explosions. These explosions usually happened when other cars would rear-end the Ford Pinto, causing the bolts and screws that kept the fuel tank in place to become punctured and cause leakage. Although this was discovered when Ford performed their safety tests, it did not consider this a major threat. The cost-benefit analysis was a crucial factor in determining how Ford would proceed with the project. According to Ford, with the help of the NHTSA, they were able to estimate how much money would be lost or gained if they were to either leave or modify the fuel tanks. Ford estimated that these unmodified tanks would cause 180 deaths, 180 injuries, and 2,100 cars or trucks damaged by fire. Even though these numbers may seem ridiculous, they are just the beginning of Ford’s ignorance and carelessness. Ford calculated that they would have to reimburse $200,000 for each fatality, $67,000 for each injury, and $700 for each vehicle.

This all comes together for a grand total of $49.5 million. Yes, $49.5 million is a lot of money, but it does not compare to the amount that Ford would have lost if they were to make the safety modifications to the fuel tank. Ford argued that it would cost way more to spend $11 per car or truck and have it safely modified than to leave it as is. Ford was not wrong about their estimates. In the end, Ford would have lost up to $137 million if it had gone through the safety modifications.

Ford essentially argued that it was more efficient and cheaper to have their own customers suffer and die rather than modify the car to protect them. Below is a table explaining the cost breakdown. Benefits Risk Savings: 180 fatalities, 180 injuries, and 2,100 fire-damaged cars Sales: 11 million cars, 1.5 million light trucks.

Unit cost:

• $200,000 for each fatality,
• $67,000 for each injury,
• and $700 for each car.
• Unit Cost: $11 for each car,
• $11 for each truck.
• Total benefit: 180 * ($200,000)
• + 180 * ($67,000)
• + 2,100 * ($700) = $49.5 million.

Total cost:

• 11,000,000
• * ($11) + 1,500,000
• * ($11) = $137 million.

This case relates to many of the principles, but the two main principles that I think this case relates to the most are the principle of personal virtue and the principle of distributive justice. The textbook defines the principles of personal virtue by stating that you should never do anything that is not honest, open, and truthful and that you would not be glad to see it reported in the newspaper or on TV.

If I were Ford in this case, I would not want to see a headline in the newspaper saying that my company is ignorant and does not care about the safety of its customers. That would make the company look really bad. The textbook definition of the second principle states that you should never take any action that harms the least fortunate among us in some way. The Ford Pinto was designed so that most people could afford it. Ford violated this principle because people are trying to use the car as a means of transportation to provide for their families, but their lives are in danger while doing so. Ford did so many things wrong, but the fact that Ford knew that the fuel tank was a threat makes me really uneasy. They essentially valued money over human lives, and in the end, they lost even more money because they had to recall every single Pinto.

Cite this page