Business Ethics

Business and Ethics

In this essay, Ford Pinto case, which created controversies in the early 1970’s, will be analyzed. This case is important to be analyzed since it reflects the importance of ethics in the business.

Ford Motor Company Background

Ford Motor Company is an American multinational enterprise which is dedicated to design and fabrication of automobiles. This Company was founded in 1903 beginning in an old warehouse of a small wagons factory. Henry Ford held 25% of the shares of the company. However, he was named as Vice-president, while also exercising the role of general manager and technical director.

The first cars had many faults, but as the years passed, they remolded car models and sales were growing. Because of this, Henry Ford was buying shares of its partners, and so we got the majority of the shares in the company, and won the presidency of the company.

Creation of the Pinto

In the early '70s, Ford's position in the automobile market was being heavily eroded by competition from foreign manufacturers, especially Japanese companies producing compact cars with great fuel efficiency.

Lee Iacocca, the president of Ford by that time, was fighting desperately to regain Ford's participation in the market. Its strategy is focused on design, manufacture and market a new car quickly to be called Pinto. It would be a low cost subcompact would weigh less than 2000 pounds, cost less than $ 2,000.

"The Pinto was not to weigh an ounce over 2,000 pounds and not cost a cent over $2,000." (Lee Iacocca)

Ford Pinto Case (1970’s)

This case describes and analyzes the main events related to the creation of a vehicle, Ford Pinto. It was launched in 1971 to compete in the American Market against the imported vehicles, and it became a huge commercial impact due to the Ford Pinto was a great project. Its engineering design was, supposedly, in a better level than the usual.

Particularly, the Pinto style consists in that fuel tank was placed behind the rear axle, which would be in greater danger of drilling in case of a rear-end collision. As if the problem were not enough, the poor quality of the sheet metal body that was constructed with, increased the possibility that any small hit would reach the gas tank. Also, this poor body generated another serious problem. In the collision the car was deformed, the doors were locked, and the individuals in the car trapped in the flames. Even though Ford Company knew about this issue, they still decided to produce the Pinto.

As a consequence, it is estimated that in the decade after at least 60 people died in the flames caused by accidents driving Pinto cars. Besides, many other people suffered serious burns on their body, which in many cases took years of painful skin grafts.

THESIS:

Ford Company

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