1-51 In the 1970s the Ford Motor Company sold its sub- compact Pinto model with known design...
Question:
1-51 In the 1970s the Ford Motor Company sold its sub- compact Pinto model with known design defects. In particular, the gas tank's design and location led to rupture, leaks, and explosion in low-speed, rear- impact collisions. Fifty-nine people burned to death in Pinto accidents. In a cost-benefit analysis weigh- ing the cost of fixing the defects ($11 per vehicle) versus the firm's potential liability for lawsuits on behalf of accident victims, Ford had placed the value of a human life at $200,000. Ford eventually recalled 1.4 million Pintos to fix the gas tank problem for a cost of $30 million to $40 million. In addition the automaker ultimately paid out millions more in liability settlements and incurred substantial damage to its reputation.
(a) Critique Ford's actions from the perspective of the NSPE Code of Ethics.
Step by Step Answer:
Engineering Economic Analysis
ISBN: 9780357419687
11th Edition
Authors: Donald Newnan, Ted Eschenbach, Jerome Lavelle