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Wyatt Moore

COM110
9/28/16
Product Recall Informative Speech
Who here has ever made a mistake? I know I certainly have.
Everybody makes mistakes. Anyone who has ever made something
knows that sometimes, you just don’t get it quite right. And just like people,
companies don’t always get it right either. The process you go through in
handling a mistake, however, is very different than a company’s. Company’s
address mistakes in their products by deciding whether or not to issue a
product recall.
In the early 1970’s with gas prices on the rise American consumers
were looking for smaller, more efficient vehicles. Japanese manufactures
were already experts at this kind of car and were taking control of the
American market at an alarming rate.
In order to compete, the president of ford rushed a car into production
that would later be named the Ford Pinto; a car I’m sure many of you have
heard of. Slated to cost 2,000 dollars, or roughly 12,000 dollars in todays
money, Ford’s new more fuel efficient car was pushed through the early
production and testing phases.
Along the way, however, Ford engineers realized there was a problem
with the design. The gas tanks position left the car vulnerable to rear end
collisions. And not only that, when struck from behind in an accident at over
20 miles per hour the gas tank could rupture and even spray fuel all the way
into the passenger compartment. This meant that a fire, ignited by sparks or
anything else, could engulf those inside.
Now no car is perfectly safe, but this very scary flaw was reason for
concern at ford. Obviously rear end collisions exceeding 20 miles per hour do
occur, and they occur quite often.
A debate at ford broke out about whether or not to go ahead with the
vehicle.
Legally, the company stood on solid ground. At the time, regulations
only required gas tanks to stay together at collisions only 20 miles per hour.
In 1990, UCLA law professor Gary Schwartz published an article in the
Rutgers Law Review found the safety record of the car in terms of fire was
average for compacts, and respectable for a subcompact car.
And again in 1992 in an article written by D.A. Goya published edition of the Journal of
Business Ethics this gas tank placement, between the bumper and rear axel of the car, was shown
to actually be the norm amongst competing cars in this class.

But what about ethically. Could the company move forward with the Pinto
knowing that these kind circumstances occur in accidents every day?
A report published in Business Ethics Quarterly in 2015 by Penn State Ethics professor
JR Danley studying the ford pinto case detailed how the executives at ford took a
“Monetized Utilitarian Approach”, the standard business practice for
situations like this at the time.
On one hand, the company totaled up the dollar cost of redesigning
the car to fix the problem. They calculated that 12.5 million cars would
eventually be sold, and that the final cost per car to implement a redesign
would be 11 dollars per car, roughly 70 dollars today. That’s 137 million
dollars total, with the money coming from Pinto buyers since the added
production cost would be added to the price tag. That’s a lot of money. But
per person, fairly reasonable.
In this scenario, there would be a very small amount of suffering
caused to the car owners, but it would be felt by a huge number of them.
On the other hand, if the decision is made to go ahead without a fix
there will be a lot of suffering but only for a very few people.
Ford predicted the damage to those few people in the following ways:
Death by burning for 180 pinto buyers, serious burn injuries for another 180
Pinto buyers, and 2100 vehicles burned beyond all repair. That’s a lot of
damage, but how do you measure it, and how do you compare it to an
increase in price?
More generally, ford had to decide what all companies have to decide
in Product Recall Cases: Is it better for more to suffer a little or for a few
people to suffer a lot?
Ford answered those questions in the standard way at the time, and in the
way that is still standard today, which is to assign monetary values to each
scenario.
At the time, a human life was valued at 200,000, a serious burn at
67,000$, and scrap value on a burned out pinto at 700$. The math from this
comes out to a total of 137 million dollars in “suffering” for pinto drivers in a
redesign, and 49 million dollars if it goes into production as is.
Ford sent the pinto out as is.
In the next decade, at least 60 people died in fiery pinto accidents, and
120 were seriously burned. It was shortly phased out, but if the first decade
of production was any indication then the total cost came in well under the
49 million dollar estimate.
So from a business, and a legal perspective Ford clearly made the right
decision back in 1970, right?
This is the dilemma of product recalls that companies struggle with,
where ethics and business meet and don’t always agree with each other.

Ford was eventually torched in the national media for this case, even though
they arguably made the right legal and business decision. Companies
nowadays are often very quick to issue a product recall, for the smallest of
flaws, but the struggle between morals and business in recall’s remains the
same.