In the 70’s ethics was not on the forefront of business executives minds, especially when making decisions that could deeply affect the company. This landmark case allows future generations to use a utilitarian analysis to decide whether Ford should have made a different choice. In 1971, Ford Motor Company produced a compact car to the public in record time and at record prices. The quick production time of the Ford Pinto was a result of Ford attempting to keep up with the competition. However, as a result, the Pinto did not undergo all necessary safety tests before it was released.
The EV 1 was also fairly pricey so many people were not interested. Another killer of the electric car was the car companies. General Motors only made a certain amount because of the Zero Emissions Mandate (ZEM) was born. It required 2% of new vehicles sold in California to be emission-free by 1998, 10% by 2003. General Motors knew that this mandate would not last long, and they were more interested in selling gasoline cars.
In 1970 Ford Motor Company launched their new line of automobile called the Ford Pinto; they used a cost-benefit analysis based strictly on how the consequences will affect themselves as a business and not as an ethical analysis. The Pinto compact car was extremely popular in the United States market because of its design and affordability. However a controversy issue regarding the safety of the design of the car gas tank emerged causing deadly fires, explosions and claiming the lives of many people, even though managers and engineers of the company knew about this problem. The argument has been for many years that Ford Motor Company abandoned and abused the utilitarian principles to suit their needs, even though they stayed within the laws of the time, they still behaved unethically by making the decision not to upgrade the fuel system of their product. The model of the Ford Pinto was approved by Lee Iacocca, Executive Vice-president of Northern American Automotive Products for Ford.
Ford Motor Pinto Utilitarian Paper Utilitarianism, in a simple definition, can be described as a normative theory that means, “Correct moral conduct is determined solely by a cost-benefit analysis of an action’s consequences” (Ethics 7). For an ethical business practice to use the utilitarian analysis it would have to consider that good and the bad consequences for everyone and the affects, treating everyone as having equal rights, and using the veil of ignorance mental stage would be the objective way to make a moral decision. Unfortunately when it comes to business, it is difficult for the company’s executives to make good ethical choices and morally correct decisions based on the utilitarian because ‘businesses seek to make a profit’ (DeGeorge 43). Businesses will use the cost-benefit analysis to help weigh the bad from the good consequences of their profit actions, while the utilitarian analysis weighs the good from the bad consequences based on everyone affected. In the late 1960’s the United States was losing market on cars due to the small imports from Japan.
There was strong competition for Ford in the American small-car market from Volkswagen and several Japanese companies in the 1960’s. To fight the competition, Ford rushed its newest car the Pinto into production in much less time than it usually required to develop a car. The regular time to produce an automobile is 43 months; Ford took 25 months. Before production however, Ford engineers discovered a major flaw in the cars design. In nearly all rear-end crash test collisions, the Pinto's fuel system would rupture extremely easily.
Given the high cost and limited range, sales were disappointing. In 1997 GM develops its own fuel-cell stack technology including first fuel cell car prototype HydroGen1. The first mover strategy gave the company the capability to use patents and intellectual property difficult to copy from competitors. By 2000, the US market has matured and foreign competition has eroded the market share of the three domestic players to less than 60%. In 2000, GM started potential working on the interface between design and technology considering three important aspects for the new car: safety, environment and performance.
Ford Pinto Case Study MGT 216 11/17/2011 Vivek Singhal Many in the corporate world are willing to do whatever it takes to compete in the global market. However, ethical business practices should always be a top priority. No company understands this better than Ford and the mistakes the company made with the release of the Ford Pinto. In 1969, Lee Iacocca, president of Ford Motor Company, convinced CEO Henry Ford II to be a competitor in the small car market, thus launching the birth of the Ford Pinto. Typically it took automobile makers approximately 3.5 years to release an automobile to the public.
* This lack of customization of Ka towards a target segment caused confusions among the customers and it is evident from the target groups interviewed, they had different perceptions of the car. * Ford should have been more strategic. It was never firm in its decisions and in a haste move to come up with a new car for small car market, they made a mistake of manufacturing a car that was not targeted to a particular market segment. 2. What were some of the major car-buying dimensions that emerged from the psychographics study?
With this knowledge, Ford Motor Company’s decision of continuing with the production and release of the Pinto was completely unethical, for 27 consumers died gruesome, untimely deaths at the hands of Ford’s gross negligence. In the following case study analysis, Ford Motor Company’s conduct will be examined by determining all of the facts, symptoms, root problems, roles of key players, and ethical issues involved. In addition, an in depth analysis of all the ethical systems at play will be offered. After determining Ford’s ethical approach to the issue, alternatives will be offered and analyzed by which Ford may have avoided such a costly ethical debacle. An analysis will also be offered detailing how various alternatives will be affected by being carried out in a different country, as well as the effects of globalization on determining the most viable alternative.
The Ford Pinto Case Review of the Case The Pinto is a car that was manufactured by Ford from 1971-1980. The Pinto was Ford’s answer to match the increasing popularity of smaller cars, also known as subcompact cars, which were being imported by Toyota and Datsun. Iacocca’s specifications for the design of the car were very specific. "The Pinto was not to weigh an ounce over 2,000 pounds and not cost a cent over $2,000 (Unlisted, 2006)." It was discovered in rear end crash tests, even before the car was sold to the public, that the fuel tank would rupture and begin spilling fuel in collisions over 25 mph and that collisions of over 40 mph would result in the front doors jamming making it almost impossible to get the passengers out of the car.