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~ Pinto Case Study ~
Team E
PowerPoint PresentationPamela Hughes
Cathleen Miller
Jesseca Hernandez
Was Ford to Blame?
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How Safe is Safe?
* ’73 Pinto
* Rear-Ended
* High-Speed by Van
* Possibly Impaired Driver
* Burst into flames
* No Chance to Escape
~ Death of 3 Girls 08-10-1978 ~
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Pinto Rushed Into Production
* Without Adequate Testing
* Vulnerable Fuel System* Would Rupture with any Rear-End Collision
* Successful Lobbying
* Requirements of Safer Gas Tanks
What about testing?
Mass Production
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~ Sandra Gillespie & Robbie Carlton ~
A Tragic Casualty
Vehicle Stalled
* Rear Ended at 28mph
* Gas Tank Ruptured
* Car Exploded
* Sandra Died at Hospital Emergency* Robbie Lives, Burned & Emotionally Scarred
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Why Did Pinto Catch Fire So Easily?
Behind Rear Axle* Over-the-Axle Tank * Closer to Passengers in Back Seat
* Fighting Strong Competition with Volkswagen Rushed pinto into production in much less time Ford officials decided to manufacture the car even
though the defect was found
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23 months to roll-out (not 45)
PRODUCT OBJECTIVES:1. TRUE SUBCOMPACT :
Size & Weight2. LOW COST OF OWNERSHIP
Initial price, Fuel consumption, ReliabilityServiceability3. CLEAR PRODUCT SUPERIORITY
Appearance, Comfort, Features,Ride and Handling, Performance
Lee Iacocca was fond of saying, "Safety doesn't sell."
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Successful Lobbying
Prevented the company to change gas tank
* 500 burn deaths* Waited 8 yrs to make alterations to the gas tank
* Waited so long because the internal cost benefitanalysis want profitable to make changes
sooner.
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What was life worth in 1971?The Ford Cost-Benefit Analysis
Component 1971 Costs
Future Productivity Losses
Direct $132,000
Indirect $41,300 Medical Costs
Hospital $700
Other $ 425
Total $1,125
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Cost/Benefit Analysis:Recall?
Benefit Analysis Savings:
180 burn deaths, 180
serious burn injuries,2100 burned vehicles
Unit Cost $200,000 per death,
$67,000 per injury,$700 per vehicle
Total Benefit (180 X $200,000) +
(180 X $67,000) +(2,100 X $700) =$49.5 million
Cost Analysis Sales
11 million cars, 1.5
million light trucks Unit Cost
$11 per car, $11 pertruck
Total Cost 12.5 million X $11
= $137.5 million
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Cost/Benefit Analysis Cont’d
Costs $137.5 Million
Benefits - $49.5Million
Difference $ 88.0 Million
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Pinto recall
Ford was first urged to recall the Pinto in 1974,by the nonprofit Center for Auto Safety.
Late in 1978, Ford recalled all 1971-1976 Pinto
models (1.5 million cars) Modifications
Longer fuel filler neck
Plastic shields
Protected from rear differential
Protected from rear shock absorber