Ethical Analysis of Lee Iacocca Based On The Ford Pinto Case

Ethical Analysis of Lee Iacocca Based On The Ford Pinto Case
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Ethical Analysis of Lee Iacocca Based On The Ford Pinto Case
Background
The world of business is so diverse and companies try different means not only to remain in business but also to make a good profit. Policies have been developed to guide the steps and decisions a company takes to maximize profits. Some of these policies include the risk/benefits analysis that guides on the cost a company should incur depending on the possible risks the business has on society. It is this great appetite for profit that makes companies apply policies that bring ethical issues as was the case of Ford Pinto. In May of 1968, Ford Motor Company, based upon a recommendation by then vice-president Lee Iacocca, decided to introduce a subcompact car and produce it domestically (Leggett, 1999). To gain a large market share, and beat the Volkswagen competition, the automobile was designed and developed on an accelerated schedule, which was not the norm of the company. The new design was called Pinto. After being released to the market, Pinto sales became so good, but not for long, until there was a public outcry of increased cases of Pinto exploding into a fire and causing serious injuries and deaths to people. This incident has attracted several court cases and interest in understanding how the company compromised the ethical standards. This section analyzes the ethical issues in regards to the CEO of Ford Motor Company, Lee Iacocca’ and his Pinto recommendations.
Releasing Of Pinto to the Market, Knowing It Was Not Safe
It was unethical for Lee to sell a substandard car model, Pinto, just for profit greed. Lee Iacocca was the man behind the idea of Pinto production, which was not to weigh more than 2000 pounds and sell less than $2000 (Wojdyla, 2011). Matteson and Metivier (2021) explain that the Pinto car was named after Lee with the insiders calling it the “Lee Car”. Available data reveals that Pinto was produced on a very strict budget, which meant that the company under the leadership of Lee was not ready to do any pre-production design changes. As a requirement, the prototype of Pinto was tested and a majority of them proved that they can easily catch fire after a collision, which was against the National Highway Traffic Administration. Instead, the company went on to release Pinto knowing well that the fuel tank had an issue and that Pinto was very hazardous to society. The issue raises ethical questions as to why Lee would sell a car that he knew would kill people.
Adoption of Cost/Benefits Analysis at the Expense of People’s Lives
The defense by Ford Motor Company was that they used a cost/benefit analysis, which was legal. However, it was wrong for Lee to allow the adoption of cost/benefit analysis without considering its implication to public safety. Pinto was more of a scandal that was covered by an economic standpoint of justifying substandard products in the market, long before the development of business ethics. According to Lutge (2018), the development and increased awareness of business ethics started in the US during the 1970s, as a consequence of several corporate scandals”. One of these sc...