Paying the Pinto Price - Risk & Reward 02


Risk&REWARD - Issue 02

PAYING THE PINTO PRICE

The Worst Case Scenario

Thud. A rear-end collision. Crunching metal. Rushing air. Your head snaps back against the leather upholstery. A pop. A whoosh. You groan, dazed by the sudden impact.

“Seriously?” You muster. Then you feel the heat. As your head clears, you realize the car is engulfed in flames. Annoyance turns to panic, and as you try to desperately open the door, you realize it has been jammed shut by the collision. You are in a prison, and the prison is on fire.

How the hell did this happen?

The Pinto Story

Before the 1970s, American vehicles had characteristically large chassis and bulky frames - a staple design trend that was gradually falling out of favor with the consumer. The sudden emergence of affordable and reliable foreign subcompacts like the Toyota Corolla and Datsun 510 in the 1960’s presented U.S. automakers with a challenge: innovate or lose market share.

Ford CEO Lee Iacocca had a bold vision for a new vehicle. He gave his engineers a strict mandate: Ford would design a subcompact, the Pinto, and it would weigh under 2000 pounds and cost under $2000 (roughly $18k today adjusted for inflation). Iacocca was known for making decisions based on this kind of numerical symmetry - it had proven immensely successful before in Ford’s marketing and in inspiring initiative and creativity among Ford’s engineers. Beyond these ambitious constraints, the Pinto had a record-breaking 25 month development schedule (the industry average being 43). Decisions that could slow the project schedule, challenge the budget, or exceed the weight requirement were heavily discouraged by leadership.

The way the story goes, Ford engineers found a crucial design flaw during crash-testing of the Pinto. The design of the Pinto’s rear, specifically the placement of the gas tank, made it heavily prone to exploding in rear-end collisions - even at low speeds. To make matters worse, the design of the vehicle's frame could jam the doors shut in the event of a rear-end collision. These flaws, when combined, turned the Pinto into a mobile human barbecue. Potential solutions were identified, but the cost-to-implement ultimately would come to $11 per vehicle, potentially causing the Pinto to fail at meeting Iacocca’s strict specifications.

The Pinto went to market, and somewhere between 500-900 people tragically died in a 5 year span as a result of this flaw. The cost-benefit analysis that Ford used to justify their decision to forego the repair was outlined in an infamous document known as ‘The Pinto Memo’ - which was released by an investigative journalist at Mother Jones News. It revealed that Ford calculated the cost to make necessary adjustments to the Pinto fleet at $137 Million. The cost of burn injuries and loss of life without adjustments: $49.5 Million. This was Ford’s calculus of death.

It’s a compelling narrative. But is it true?

…Not really.

The Truth

Just like cars are a business, journalism is a business. And in journalism, some stories sell better than others.

  • Journalists claimed Ford’s crash tests made the fuel system design issue obvious.

In reality, The crash tests were inconclusive. They weren’t measuring the Pinto fuel-system’s integrity - they were conducted to develop industry standards for crash-testing to begin with. Engineers cautiously opted for conventional gas tank placement & design over unproven solutions after witnessing the Pinto's performance.

  • Journalists claimed the Pinto was an unsafe, catastrophically hazardous vehicle with an abysmal safety performance.

In reality, the Pinto ultimately had perfectly average safety performance for subcompacts of its class. In fact, the placement of the gas tank was standard to every other model subcompact at the time, and there were several vehicles that performed far worse than the Pinto in the exact same collision scenario.

  • Journalists claimed that up to nearly 1000 people died inside the Pinto thanks to the exploding gas tank.

In reality, only 27 deaths occurred in the time period examined by Mother Jones News.

  • Journalists claimed that the Pinto Memo factored in tort liability against the human cost of their faulty design.

In reality, the Pinto Memo did not estimate Ford's tort liability costs against the cost of recall. It was not an operationally significant document in this way.

There’s an interesting parallel at play: just as Iacocca clung irrationally to numerical symmetry in his design specifications for the Pinto, journalists clung to their hypothesis: Ford traded lives for profit. The narrative surrounding the Pinto was so compelling that it remains a prominent topic in university business ethics classes to this very day.

There’s a famous scene inspired by the Pinto debacle in Chuck Palahniuk's ‘Fight Club.’ The protagonist describes his job as a recall coordinator for an automobile company that knowingly shipped out vehicles with faulty rear-differentials that would lock up, causing the cars to combust into flames and torch the occupants alive. He would apply a formula for determining whether to initiate a recall:

“Take the number of vehicles in the field, A, multiply by the probable rate of failure, B, multiply by the average out-of-court settlement, C. A times B times C equals X. If X is less than the cost of a recall, we don't do one.”

It’s true that recall coordinators follow a standard operating procedure that involves estimating the human cost of design issues - but the formula in Fight Club is a complete fabrication. The real world doesn’t work this way, even if it makes for a more compelling headline.

To parody a line by G.K. Chesterton: Safety design decisions, like art, involve drawing the line somewhere.

Otherwise, every vehicle ever made would have diamond roll cages and racing-grade seatbelts.

The story of the Ford Pinto isn’t about corporate greed, shady business practices, and consumer disregard. The story of the Ford Pinto is about a lack of integrity in journalism. It’s about a brilliant vehicle made on an accelerated time-frame by a dedicated team of engineers working against tight physical and financial limitations. It’s about how one American auto manufacturer successfully built an import-fighter to stave off foreign competition and protect American auto workers.

The journalistic method, contrary to the scientific method, involves first developing a conclusion based on background research, and then interpreting data to support that conclusion while ignoring data that refutes it. In other words - good journalism is bad science.

Lee Iacocca is often quoted by journalists as saying that “safety doesn’t sell.”

Maybe so — but then, neither does the truth.

Written by Sam Louwrens
Lead Editor

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“There is a case for telling the truth; there is a case for avoiding the scandal; but there is no possible defense for the man who tells the scandal, but does not tell the truth”
- G.K. Chesterton

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