Ford's "Pinto" Memo

 

The following figures are drawn from the 1973 memorandum* written for and circulated amongst senior management
at the Ford Motor Company concerning cost-benefit analysis of retrofitting or altering production of autos and light
trucks susceptible to fires from leaking gas tanks after roll-over.


 

Fatalities Associated with Roll-Over-Induced Fuel Leakage and Fires

 

Expected Costs of producing all US cars and light trucks with fuel tank modifications:

 

Expected Costs of producing vehicles without fuel tank modifications:

Thus, the costs for fixing the roll-over problem was $137 million, while the computed cost of cases where injuries occur was only $50 million.

It is unclear exactly how this information was utilized by Ford management, and controversy remains about how early in time senior managers were aware of the problem of crash-induced fires in the Pinto, which became the focus of civil and criminal litigation.

What would you do? Why?


*"Fatalities Associated With Crash Induced Fuel Leakage and Fires," by E.S. Grush and C.S. Saundy, Environmental and Safety Engineering.

**By the way, the $200k and $67k figures for the average value of a lost or injured adult life is drawn from the NHTSA (National Highway Traffic Safety Administration) calculation of the estimated costs to society of automobile accidents. It is not a low-ball figure fabricated by Ford. (For example, the $200k for death was calculated by adding estimated direct costs of $163k -- such as loss of future earnings, plus $37k of indirect costs -- such as hospital and insurance costs, legal and court costs, victim pain and suffering, funeral costs, and property damage.) This is the calculation typically used by the U.S. Federal government for performing cost-benefit analyses of highway construction projects (e.g. determining how safely we should build our roads and highways). Even today, such figures are commonly used by many state and local, as well as federal, government agencies to weigh costs of various tax-supported programs.