Ford Vs Pinto

912 Words4 Pages
In the late 1960’s Japan and Germany were producing numerous vehicles to compete against American made cars. Ford motor company wanted to produce a subcompact car to “meet the threat from abroad head on” so Ford came up with the Ford Pinto. These cars were made to be affordable and domestic, in order for a large quantity of Americans would be able to afford them. With the idea originating in 1968 to meet the deadline Ford they “decided to compress the normal drafting board to showroom time of about three and a half years into two”. After numerous crash-tests of Pinto prototypes that ended up in a fiery blaze. Ford decided to go ahead with producing the Pinto’s knowing that there was a fuel tank malfunction causing cars to catch fire, not only…show more content…
Ford used the following data from the National Highway Traffic Safety Administration to make its decision regarding the Pinto. Each traffic fatality is deemed to be roughly $200,000 and a traffic injury would cost $67,000 and the cost for each damaged vehicle would be $700. With this Ford estimated that there would be roughly 180 fatalities, 180 serious injuries and 2,100 damaged cars. In total this estimate comes out to roughly 50 million dollars. However, the $11 addition to each car to fix the gas tank would be 11 dollars times the 11 million cars and 1.5 million trucks that had these issues. This sums up to roughly 140 million dollars that could affect the company. In total, Ford would be saving roughly $90 million dollars by not fixing the gas tanks. With these numbers, Ford made the business savvy move to not feel obligated to fix the gas tanks and allow the faulty products to be…show more content…
But furthermore there is also the notion that, “cost benefit analysis tries to bring rationality and rigor to complex social choices by translating all costs and benefits into monetary terms- and then comparing them”. All things cannot be put on a single scale and be compared to one another. With this being said, the Pinto case shows Ford’s lack of utilitarian reasoning in its decision to continue with the production of the Ford Pinto with the known gas tank defects because Ford should not be able to compare the price of a human life with the damage of a car in which they know exactly how much each part costs. But they can not individually price a life of a human being and the future happiness that individual may have, which would not be maximizing their utility to prematurely end their life by a faulty car. With the $11 increase in price necessary to fix the faulty gas tank, this price would be directly imposed on the consumer and not Ford itself. Ultimately consumers would be willing to pay eleven more dollars in order to purchase a car that would not burst into flames upon a low speed crash from behind. With this, Ford maximized their profits from the Pinto, but did not maximize the utility of the population as a
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