1. Which view of CSR do you believe Ford’s managers had when making the Pinto decision?
2. Suppose that the changes necessary to make the design safer would have cost Ford $1,000 per car, instead of $15 per car as the plaintiff alleged. Would this fact have changed the outcome of the case?
In an effort to add a more fuel-efficient car to its line of automobiles, Ford designed the Pinto. During the design phase, Ford engineers became concerned that the placement of the gas tank was unsafe and subject to puncturing and rupturing at low-impact speeds. Crash tests confirmed this dangerous design flaw, and engineers recommended halting production until a more safe solution was developed. However, Ford’s management overruled the engineers and pushed the Pinto into the manufacturing phase. There was evidence that Ford considered the design alternatives too expensive and decided that the proposed fix would have a higher overall cost than the risk of liability from lawsuits as a result of injuries to its customers. Richard Grimshaw, a passenger in a Pinto, was injured when the gas tank erupted in a low-speed crash. The jury found Ford liable for Grimshaw’s injuries and awarded him $125 million. The trial court reduced the award to $3.5 million pursuant to a California state statute.
The California appellate court upheld the jury’s verdict and the $3.5 million award. The court pointed out that the dangerous design flaw carried with it the severe risk of injury and that the evidence showed that Ford would have had to spend only $15.30 per car to have made the Pinto safer.
“[T]here was substantial evidence that Ford’s management decided to proceed with the production of the Pinto with knowledge of test results revealing design defects which rendered the fuel tank extremely vulnerable on rear impact at low speeds and endangered the safety and lives of the occupants. Such conduct constitutes corporate malice.”
