Friday, March 5, 2010

A Sordid Tale

The sordid story of the Ford Pinto is an instructive study of the corporate mindset. In the late 60s, small foreign cars such as the VW Beetle were giving American automakers a run for their money.

Lee Iacocca, a Ford vice president, told Henry Ford II he could produce a car that would weigh less than 2,000 pounds and cost less than $2,000. And he promised Ford to have the car in dealer showrooms by 1971.

In the auto industry the normal time it takes to go from planning to production is 43 months. Iacocca had the Pinto in production in 25 months.

During the initial design stage, engineers had become concerned over the fact that the gas tank was jammed hard against the back seat. They feared it might rupture in the event of a rear-end collision. In such a scenario, the smallest of sparks could set off a raging inferno.

Iacocca blew off the objections. As one engineer commented, “The company is run by salesmen, not engineers.”

Once the car was in production, actual crash tests proved that matters were even worse than engineers had originally feared. The gas tank would ruptured in rear-end collisions as slow as 25 mph. At 40 mph, the doors became jammed shut and occupants were trapped in a burning car.

What to do.

Hell! That was easy! Ford commissioned a cost-benefit analysis.

They estimated that the Pinto, as designed, would cause 180 burn deaths and 180 burn injuries. At $200,000 a death, $67,000 per injury and $700 per vehicle, the total cost to the company would be $49.5.

Redesigning the car to make it safe would cost the company $137 million.

It was a no brainer. The Pinto hit the market unmodified.

One wonders, in amazement, at the mindset that would let people burn just to save a few bucks. However, that’s the rub. In the corporate world, there are no people, only numbers.

What we have here is an example of corporate sociopaths at work. To the corporate sociopath, quantification is all. In this sterile world, there is no death, no blood, no gore, no charred bodies, no suffering, no cries of pain, no broken lives and no motherless children.

There are only numbers, and if the numbers justify an act, no matter how horrendous, then everything is fine because the corporate sociopaths are meeting their fiduciary obligations to their stockholders.

Life’s easier than way. There are no sticky ethical questions to deal with. All the sociopath has to do is lean back and let the numbers do the thinking for him.

Incidentally, there is a coda to this tale. Ford could have made the Pinto safer for less than the cost o the deaths and injuries. Goodyear had developed a rubber bladder that could be placed inside the gas tank , thus preventing the tank from rupturing. They didn’t consider it because Iacocca wanted the cars in Ford showrooms by 1971, and modifying the car would have delayed its introduction and possibly cost Ford some market share.

It was those pesky numbers again.


Case Wagenvoord said...

Thank you for your kind words.

Dave Mackey said...

Very interesting story, Case. I'm reminded of the Pinto's competition in the small-car market, the Chevrolet Vega - the issue with that one was that it was cheaply made and it showed. The 140 c.i. aluminum engine, body panels failing, all sorts of problems. Yet, it was a staple of early 70's tv game shows. No one ever gave Pintos away - it was always Chevy Vegas, every show you watched (in fact, the first car ever given away on the current "Price is Right" was a Vega). One lady on a show called "Baffle" won five of them. I'm sure she sold em all to some poor suckers hanging out in the NBC parking lot.

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