The early 1970’s brought about several major changes that ultimately led to a new line of cars. Competition from Japanese automobile manufacturer’s was growing, gas prices were gradually decreasing, and while awaiting the 1973 to 1974 Arab oil boycotts, demands for energy conservations were about to see a boost. With Lee Iacocca as president of Ford Motor Company, the Ford Pinto was developed. The Pinto weighed approximately 2,000 pounds and cost $2,000.

Before the introduction of the Ford Pinto to the public, crash tests indicated that the vehicle had several dangerous flaws in its design. In a rear end collision at an impact speed of 20mph or more, the gas tank was located in an area that would cause it to rupture, leading to a fire or explosion. The vehicle’s gas tank was a mere five inches from the sheet metal in the rear and three inches from the back of the rear axle housing. In the majority of the rear-end crash tests, protruding bolts punctured the tank and the axle housing became deformed. In 20mph moving barrier crashes, the crash distance on the rear end was more than eight inches.

Following the crash tests, Ford concluded that the vehicle’s rear end structure was not efficient due to various damage deformations of the gas tank, including leakage to the filler pipe. Repairs to these defects were not costly, averaging $11 per vehicle. In 1971, a confidential company memo was issued, stating that no additional safety features will be adopted for the 1973 and later vehicles until it becomes required by law.

Later, a cost-benefit analysis developed by Ford concluded that adding $11 per car to correct the flaws was not cost-efficient. Advantages derived from spending the cost per car estimated to an approximate total of $49.5 million. This amount was estimated by assuming that each death that could have been avoided would be worth $200,000, each severe burn injury that could have been avoided would be worth $67,000, and average repair costs for vehicles involved in rear end collisions would be worth $700 per vehicle. This calculation included 2,100 burned vehicles, 180 severe burn injuries, and 180 burn-related deaths. When this unit cost was spread over the number of vehicles affected by the change in design at $11 per car, the cost averaged $137 million – which was much more than the $49.5 million advantage.


Ethical Impacts

Cost-Benefit Analysis

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