Not Very Sure

In: Business and Management

Submitted By dimple0657
Words 421
Pages 2
Business Ethics - Assignment 1

Case Study:

At the beginning of the 1960's, the Ford Motor Company was facing great competition from foreign automobile manufacturers. The Japanese companies, Toyota and Datsun, were importing fuel-efficient, low-cost automobiles. Every year the Japanese companies were capturing larger portions of the U.S. automobile retail market and profits of American auto manufactures were spiraling downward. The president of Ford at that time was Lee Iaccoca, who was desperately in need of a new model car that could be quickly and cheaply manufactured. The “Pinto” was the result. It was small, weighing only 2000 lbs.; it was cheap, costing less than $2000 to make; and it was quick, going from design to market in only two years. Because most automobile designs require four years to materialize for the public, the pinto was truly a rush job. The styling of the Pinto required that the fuel tank be placed behind the rear axle. This placement made the fuel tank more susceptible to puncturing in a rear-end collision, spilling of fuel into the passenger space, and greater likelihood of related fires following accidents. During early crash testing of the Pinto, Ford determined that in rear-end collisions below a 20 mph impact speed the gas tank would sometimes rupture.

Based upon three general criteria, Ford engineers decided to proceed with the manufacture of the Pinto.

1) Engineers and executives of Ford considered the Pinto to be as safe as the competitor’s compact cars.

2) Federal regulations required that the fuel tank remain in tact in collisions less than 20 mph. Early crash tests proved that the Pinto would pass the test most of time.

3) A cost-benefit analysis realized the following: A) Fuel tank modification would cost $ 11 per vehicle. B) The total of 12.5 million Pintos were manufactured C)…...

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