In the 1970's the Ford Motor Company sold its subcompact Pinto model with known design defects. In particular, the gas tank's design and location led to rupture, leaks and explosion in low-speed, rear-impact collisions. Fifty-nine people burned to death in Pinto accidents. In a cost-benefit analysis weighing the cost of fixing the defects ($11 per vehicle) versus the firm's potential liability for lawsuits on behalf of accident victims. Ford had placed the value of a human life at $200,000. Ford eventually recalled 1.4 million Pintos to fix the gas tank problem for a cost around $35 million. In addition the automaker ultimately paid out millions more in liability settlements and incurred substantial damage to its reputation. a. Critique Ford's actions from the perspective of the NSPE code of Ethics. b. What should engineers do when the product they are designing has a known safety defect with an inexpensive remedy?

In the 1970's the Ford Motor Company sold its subcompact Pinto model with known design defects. In particular, the gas tank's design and location led to rupture, leaks and explosion in low-speed, rear-impact collisions. Fifty-nine people burned to death in Pinto accidents. In a cost-benefit analysis weighing the cost of fixing the defects ($11 per vehicle) versus the firm's potential liability for lawsuits on behalf of accident victims. Ford had placed the value of a human life at $200,000. Ford eventually recalled 1.4 million Pintos to fix the gas tank problem for a cost around $35 million. In addition the automaker ultimately paid out millions more in liability settlements and incurred substantial damage to its reputation. a. Critique Ford's actions from the perspective of the NSPE code of Ethics. b. What should engineers do when the product they are designing has a known safety defect with an inexpensive remedy?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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