1 / 18

Ford Pinto Case

Ford Pinto Case. Bus 303 Group N. Agenda. Summary Cost Benefit Analysis Ethical Issues Change Alternatives Recommendation. Summary. The Ford Pinto – a small car to compete with foreign car company competitors Pinto – weighed 2000 lbs and cost $2000 Rushed project led by Lee Iacocca

maire
Download Presentation

Ford Pinto Case

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Ford Pinto Case Bus 303 Group N

  2. Agenda • Summary • Cost Benefit Analysis • Ethical Issues • Change • Alternatives • Recommendation

  3. Summary • The Ford Pinto – a small car to compete with foreign car company competitors • Pinto – weighed 2000 lbs and cost $2000 • Rushed project led by Lee Iacocca • Planning took 25 months compared to the industry norm 43 months

  4. Summary • Testing found several safety defects • @ 25mph+ the gas tank would rupture in an accident • @ 30mph+ rear endings would cause the gas tank to leak and the rear of the car to be folded up into the back seats • @ 40mph+ the car doors would jam

  5. Cost Benefit Analysis

  6. Ethical Issues • Ford employees • Lee Iacocca • Henry Ford II

  7. Ford Employees • Were they morally responsible to refuse to produce a car they knew would hurt the customer? • Should they have put more effort into convincing Iacocca that this car was unsafe? • Should they follow Iacocca’s commands regardless of their opinions since he is their superior in the company

  8. Lee Iacocca Safety? What safety. • Is Iacocca responsible for the safety of his customers? • Should he maximize profits for the company at any costs? • If safety defects are found after production, does he have a moral obligation to inform all his customers? • Should Iacocca have established a working environment where his employees did not feel that they would lose their jobs for disagreeing with him?

  9. Henry Ford II • Should Ford have trained his managers and presidents in safety? • Does Ford have a responsibility to design a culture that encourages employees to bring up safety defects? • Does Ford need to have a new policy that puts the has safety of their products more important than maximizing profits? • Does Ford have a moral responsibility to do what is best for his shareholders

  10. Change • Young and ambitious new president • Foreign competitors entering N.A. market • No small car to compete with VW Beetle and others • The demand for results and profits are the most important aspect of business

  11. Alternative Solutions • Pay the $11 per vehicle • Explore different safety features • Restart the project from the planning process • Continue with production of the Pinto

  12. Add $11 Safety Addition Pros Cons • Repairs the safety defect • Saves Ford from potential lawsuits • Protects Ford’s reputation • High cost • Slight delay before launch

  13. Explore Other Safety Measures Pros Cons • A cheaper alternative could be found • Profit margin could be higher than first alternative • Repairs the safety defect before launch • Pinto release would be delayed indefinitely • Still decreases total profit

  14. Return to the Planning Stage Pros Cons • Design can be more focused on safety • Improve Ford’s reputation • Significant delay of launch • Most costly alternative

  15. Continue with Production Pros Cons • Releases the Pinto to the customers immediately • The largest profit margin is obtained from each Pinto sale • Selling unsafe products to customers – could lead to serious injuries and deaths • High chance of lawsuits against the company • If/When injuries occur, loss of reputation

  16. Recommendation Explore Other Safety Measures • Repair the Pinto so that it is a cheap, safe car that will please the customers • Act as a responsible company and not expose customers to unknown risks • Implement a more cost effective option than adding the $11 safety addition • Save lives by not releasing unsafe Pintos

  17. What Happened • Ford workers were afraid to talk to Iacocca about the safety defects • In Feb. 1978, Ford was sued for $128 million – more then 3 times the amount they had predicted • May 1978 – Department of Transportation announces defects with the Ford Pinto – Ford recalls 1.5 million Pintos • Mar. 1980 – Ford was charged with reckless homicide – acquitted of charges, however they stopped all Pinto production

  18. Thank you! Questions?

More Related