The Ford Pinto is one of the most infamous car models known today. Ford’s answer to Japan’s compact cars, the Pinto was a popular car in the 70s among consumers looking for something a little smaller. The problem? The car’s gas tank tended to explode. Ford’s response (or lack there of) is one of the most famous examples of how liable a manufacturer is for its products, and how willing a court may be to inflict damage upon an unscrupulous company.
What happened?
Competition overseas drove Ford to design a compact car on American soil for the small-car segment. Ford set an ambitious production deadline of 25 months. While testing the vehicle for rear-end accidents, Ford found that the Pinto’s gas tank was incorrectly placed. It was behind the rear bumper, and when the car was rear-ended, the tank would rip, causing gas to spill under the engine.
There were two fixes: Move the gas tank, or reinforce the tank so it couldn’t break as easily. Unfortunately, Ford chose to do neither.
Cost analyses aren’t perfect…
Ford did a cost-benefit analysis to determine how much it would actually cost to repair the Pinto’s gas tank. The actual work to the car would just cost $11 in parts and man-hours, but the delay in launch coupled with the number of cars needing repair would cost Ford a staggering $113 million. Handling the lawsuits from Pinto owners, however, would only cost around $49 million according to Ford’s calculations. Subsequently, Ford chose not to repair the gas tank and the Pinto went into production as scheduled.
What happened when the Pinto was released?
A couple years after the Pinto’s release, the National Highway Traffic Safety Commission received numerous complaints about the Pinto spontaneously combusting. On top of this, a damning Mother Jones article was published in 1974 regarding the dangers of the Pinto, and even worse, how Ford knew about the car’s safety problems but chose to produce it anyway because it was inexpensive compared to the alternative.
The climax of the Pinto debacle occurred in 1977. A man was awarded $135 million in punitive damages after his pinto exploded when he was involved in a low-speed fender bender. His damages were eventually reduced to $3.5 million, but the court’s message was clear—Ford could not disregard customers’ lives to save money.
Why was this claim important?
Ford eventually recalled and repaired all Pintos sold between 1971 and 1978. The Ford Pinto lesson was an important one for any manufactures. Product liability was not to be trifled with, and courts were willing to hand down hefty settlements in favor of plaintiffs who suffered due to a company’s unwillingness to protect its consumers’ lives.
All in all, Pinto deaths did not dramatically vary from other competitors at the time. Up to 180 people died in Pinto-related deaths. What was far more costly for Ford was the negative PR and public reception of a company that wasn’t willing to spend $11 to protect its customers and their families.