1. Was the decision not to install the rubber bladder appropriate? Use the 5-question framework to support your analysis.
2. What faults can you identify in Ford’s cost–benefit analysis?
3. Should Ford have given its Pinto customers the option to have the rubber bladder installed during production for, say, $20?

In order to meet strong competition from Volkswagen as well as other foreign domestic subcompacts, Lee Iacocca, then president of Ford Motor Co., decided to introduce a new vehicle by 1970, to be known as the Pinto. The overall objective was to produce a car at or below 2,000 pounds with a price tag of $2,000 or less. Although preproduction design and testing normally requires about three-and-a-half years and the arrangement of actual production somewhat longer, design was started in 1968 and production commenced in 1970. The Pinto project was overseen by Robert Alexander, vice president of car engineering, and was approved by Ford’s Product Planning Committee, consisting of Iacocca, Alexander, and Ford’s group vice president of car engineering, Harold MacDonald. The engineers throughout Ford who worked on the project “signed off” to their immediate supervisors, who did likewise in turn to their superiors, and so on to Alexander and MacDonald and, finally, Iacocca.

  • CreatedOctober 28, 2014
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