Leslie Adolfo BS ChE 5

Engineering Ethics

January 28, 2013 Engr. Luis K. Cabatingan

1st CASE STUDY: FORD PINTO The Pinto case centers around the issue on the appropriateness for Ford to use the cost/benefit (CB) analysis in its decision regarding whether or not to make a safety improvement in its engineering design. Cost/Benefit analysis involves the comparison between the total costs required to make the improvement in the design against the total cost for probable fatalities using the original design. The detailed CB analysis is shown in Table 1. This issue emerged when Ford set limits for 2000 for the Pinto. This meant that Ford wanted a subcompact design that weighed less than 2,000 pounds with the cost not exceeding $2,000. Upon completion, crash tests were conducted. The present design failed the 20-mile-perhour rear impact tests. The impact always led to either fuel leakage or fuel spills. From the other tests done by Ford, it was found that improvisions of the original design could be made for a much safer design. These improvisions include installing rubber bladders in the tank, and positioning the tank above rather than behind the rear axle. Application of either of the presented modifications resulted for the new fuel system design to pass the impact tests. Installation of these design reinforcements would have fixed the problem at that instant. However, a study done by Fords automotive safety director showed that it would cost the company $137 million to produce the improvised designs. A breakdown of the 137-million-dollar cost for improvising the design can be seen in Table 1 below. This projected amount means that applying the presented design modifications would cost the Ford Motor Company an additional $11 per vehicle which would indicate exceeding the $2, 000 budget limit. This additional cost seemed large for the company; especially that Pinto has met all applicable federal safety standards at that time. The estimated costs to the company were $137 million in redesigning the fuel system whereas the project benefits of making the design change was only $49.15 million. Using the cost/benefit analysis, continuing with the production of the original design without the necessary modifications seemed to be the more practical solution for the company.

Table 1. Ford's Cost/Benefit Analysis

Benefits Savings Unit cost Total benefits 180 burn deaths, 180 serious burn injuries, 2,100 burned vehicles $200,000 per death, $67,000 per injury, $700 per vehicle 180 x $200,000 plus 180 x $67,000 plus 2100 x $700 = $49.15 million 11 million cars, 1.5 million light trucks $11 per car, $11 per truck 11,000,000 x $11 plus 1,500,000x $11 = $137 million

Costs Sales Unit cost Total costs

The main concern with carrying out this decision is that, although Ford had access to a safer design which would result in 180 less fatalities, could it still be considered ethical if the company legally chooses NOT to make the design changes? Legal, I say, because Fords original design has met all the requirements set by the state pertaining to safety standards for automobiles. Also, it is acceptable to use the CB analysis as basis for the decision since it is well developed through an existing case law. This prevailing case law is culminated out of Judge Learned Hands development of product liability which states that if the expected harm exceeded the cost to take the precaution, then the company must take the precaution, whereas if the cost was liable, then it did not have to. The latter condition describes the Ford Pinto situation. But then again, does being legal necessarily mean it is also ethical? This is the common question raised by most analysts pertaining to this argument. Canon 1 of the National Society of Professional Engineers (NSPE) code states that:

Engineers, in the fulfilment of their professional duties, shall hold paramount the safety, health, and welfare of the public.

The canon stated above is obviously in conflict with the solution obtained from the CB analysis. This is one of the most common issues faced by design engineers. Harris et al. (2012) said in the

book Engineering Ethics that absolutely safe is not an attainable engineering goal. Safety, affordability, efficiency and usability are different and are often competing criteria for a good product. Usually the trade-off is between a slightly increased risk to human life as opposed to affordability of the product. Such is depicted in this case. With an attempt to resolve and clearly illustrate this issue, Table 2 below exhibits a Line-Drawing approach for the Pinto situation:

Table 2. Paradigm and Pinto Case Features

Negative Paradigm (clearly wrong) Unsafe from impact tests Does not conform to standards Neglects application of best safety precautions Worst Product Quality Highest Product Cost

Test Case --X-----------------------------------------------------X--------X--------------------------------X------------------------------------------X----

Positive Paradigm (clearly acceptable) Completely safe in impact tests Pass the federal standards Employed the best possible safety precautions Best Product Quality Lowest Product Cost

The situation of the Ford Pinto is tending towards the negative part of the spectrum since it appears to be dominated by the negative features, which suggests a clear instance of wrongdoing. This, however, still does not sufficiently cancel out the solution proposed by the CB analysis. There is a need to examine more the features of the Cost/Benefit Analysis being employed by Ford. If we examine closely the calculations in the Benefits part of Table 1, a value of $200, 000 can be seen. What makes this stand out from the rest of the values is not just because it is the highest amount in the calculations, but mainly because it is the proposed estimation for the value of a human life. The estimations of the number of deaths, injuries, and damage to vehicles were based on statistical studies. The number quantifying the cost of a persons life ($200,000) is what complicates this problem. It is impossible to establish a price for ones life. Most people would treat human lives priceless, or at least much greater than the $200,000 specified in this case. However, the said value for human life was not determined by Ford. The $200,000 for the loss of a human life was based on a study by the National Highway Traffic Safety Administration

(NHTSA). Specifically, NHTSA provided the auto industry with the number $200,725 as the value to be utilized in cost/ benefit analysis which blatantly was followed by Ford. In the issue pertaining to the Cost/Benefit Analysis, the estimated value for human life ($200,000) cannot be criticized heavily on Ford. However, the idea of using the said value and the deliberate comparison of human life to money in this particular situation can be a huge setback to personal morality. This is one of the main reasons that makes it hard for a person to accept the Cost/Benefit analysis made by Ford. Taking the respect for persons approach, it is said that each person should be regarded as worthy of respect as a moral agent. A moral agent must be distinguished from inanimate objects, such as knives or airplanes, which can only fulfil goals that are imposed externally. Hence, the way Ford considered a price for a persons life takes away the respect entitled to that person as a moral agent. In this specific ethical approach, application of the CB analysis would indicate the companys inability to take into account any sensitive consideration about quantifying a human life. Accordingly, the Act Utilitarian Approach also presents another drawback in employing the CB analysis. This approach focuses more on the consequences of particular actions. In this case, the damages or harms of not improvising the fuel system design prevailed over the benefits of such action. This is in contrast to the results of the CB analysis presented previously. The only reason for the disagreement between these two analyses is the failure of the latter (CB) to take into account other important factors. The following are the factors that had been overseen in the CB analysis: 1. Millions of dollars in settlements for the fatalities 2. Bad publicity 3. Reputational damage Taking into account these other factors using the utilitarian point of view, the harms and the benefits would be substantially closer together than what Ford previously determined in its analysis.

Proponents of the Cost/Benefit Analysis claim that such analysis is simply an effort to find some common measure for things that are not easily comparable and yet must be compared. As discussed previously, it may be insensitive to compare a human life to money. However, some comparisons need to be made and this cannot be possible without bringing all of the factors to a common ground. Taking all of these into consideration, the best way to resolve the main ethical issue is to incorporate the creative middle way approach. The attempt to solve the problem using Line-Drawing was insufficient since some important factors cannot be incorporated in this approach. In this Ford Pinto case, the more satisfactory approach in resolving the issue would be employing the creative middle way solution. Going back to the main issue, is it appropriate for Ford to use the cost/benefit analysis in its decision regarding whether or not to make a safety improvement in its engineering design? The answer would be YES. The cost/benefit analysis is undeniably the correct framework to apply in making the decision since it takes into account the overall economic value and welfare. However, the validity of the values used in the analysis is still subject to criticism. Hence, the best solution would be to apply the Cost/Benefit Analysis but this time, taking extra consideration on quantifying the human life, as well as taking into account all the possible consequences of the decision. It is very common for engineers to face these kinds of situations, especially those assigned in the design department. In determining safety and environmental standards, a choice must be made as to what level these areas should be regulated. Our idealism and personal morality usually make us stray away from these types of analyses and rational thinking. To prevent this, one must have a good grasp and understanding on the engineering ethics.

References: Harris, C.E., Pritchard, M.S., & Rabins, M.J.(2012).Engineering ethics.4th ed. Cengage Learning Asia National Society of Professional Engineers (NSPE). Code of ethics for engineers. Retrieved January 10, 2012 at http://www.nspe.org/Ethics/CodeofEthics/index.html