Pinto fires

Case 3

Ford’s Pinto Fires: The Retrospective View of Ford’s Field Recall Coordinator

Brief Overview of the Ford Pinto Fires

Determined to compete with fuel- efficient Volkswagen and Japanese imports, the Ford Motor Company introduced the subcompact Pinto in the 1971 model year. Lee Iacocca, Ford’s president at the time, insisted that the Pinto weigh no more than 2,000 pounds and cost no more than $2,000. Even with these restrictions, the Pinto met federal safety standards, although some people have argued that strict adherence to the restrictions led Ford engineers to compromise safety. Some 2 million units were sold during the 10- year life of the Pinto.

The Pinto’s major design flaw— a fuel tank prone to rupturing with moderate speed rear- end collisions— surfaced not too long after the Pinto’s entrance to the market. In April 1974, the Center for Auto Safety petitioned the National Highway Traffic Safety Administration (NHTSA) to recall Ford Pintos due to the fuel tank design defect. The Center for Auto Safety’s petition was based on reports from attorneys of three deaths and four serious injuries in moderate- speed rear- end collisions involving Pintos. The NHTSA did not act on this petition until 1977. As a result of tests performed for the NHTSA, as well as the extraordinary amount of publicity generated by the problem, Ford agreed, on June 9, 1978, to recall 1.5 million 1971– 1976 Ford Pintos and 30,000 1975– 1976 Mercury Bobcat sedan and hatchback models for modifications to the fuel tank. Recall notices were mailed to the affected Pinto and Bobcat owners in September 1978. Repair parts were to be delivered to all dealers by September 15, 1978.

Unfortunately, the recall was initiated too late for six people. Between June 9 and September 15, 1978, six people died in Pinto fires after a rear impact. Three of these people were teenage girls killed in Indiana in August 1978 when their 1973 Pinto burst into flames after being rear- ended by a van. The fiery deaths of the Indiana teenagers led to criminal prosecution of the Ford Motor Company on charges of reckless homicide, marking the first time that an American corporation

was prosecuted on criminal charges. In the trial, which commenced on January 15, 1980, “Indiana state prosecutors alleged that Ford knew Pinto gasoline tanks were prone to catch fire during rear- end collisions but failed to warn the public or fix the problem out of concern for profits.” On March 13, 1980, a jury found Ford innocent of the charges. Production of the Pinto was discontinued in the fall of 1980.

Enter Ford’s Field Recall Coordinator

Dennis A. Gioia, currently a professor in the Department of Management and Organization at Pennsylvania State University, was the field recall coordinator at Ford Motor Company as the Pinto fuel tank defect began unfolding. Gioia’s responsibilities included the operational coordination of all the current recall

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campaigns, tracking incoming information to identify developing problems, and

reviewing field reports of alleged component failures that led to accidents. Gioia left Ford in 1975. Subsequently, “reports of Pinto fires escalated, attracting increasing media attention.” The remainder of this case, written in Gioia’s own words in the early 1990s, is his personal reflection on lessons learned from his experiences involving the Pinto fuel tank problem.

Why Revisit Decisions from the Early 1970s?

I take this case very personally, even though my name seldom comes up in its many recountings. I was one of those “faceless bureaucrats” who is often portrayed as making decisions without accountability and then walking away from them— even decisions with life- and- death implications. That characterization is, of course, far too stark and superficial. I certainly don’t consider myself faceless, and I have always chafed at the label of bureaucrat as applied to me, even though I have found myself unfairly applying it to others. Furthermore, I have been unable

to walk away from my decisions in this case. They have a tendency to haunt— especially when they have had such public airings as those involved in the Pinto fires debacle have had.

But why revisit 20- year- old decisions, and why take them so personally? Here’s why: because I was in a position to do something about a serious problem . . . and didn’t. That simple observation gives me pause for personal reflection and also makes me think about the many difficulties people face in trying to be ethical decision makers in organizations. It also helps me to keep in mind the features of modern business and organizational life that would influence someone like me (me of all people, who purposely set out to be an ethical decision maker!) to overlook basic moral issues in arriving at decisions that, when viewed retrospectively, look absurdly easy to make. But they are not easy to make, and that is perhaps the most important lesson of all.

The Personal Aspect

I would like to reflect on my own experience mainly to emphasize the personal dimensions involved in ethical decision making. Although I recognize that there are strong organizational influences at work as well, I would like to keep the critical lens focused for a moment on me (and you) as individuals. I believe that there are insights and lessons from my experience that can help you think about your own likely involvement in issues with ethical overtones.

First, however, a little personal background. In the late 1960s and early 1970s, I was an engineering/MBA student; I also was an “activist,” engaged in protests of social injustice and the social irresponsibility of business, among other things. I held some pretty strong values, and I thought they would stand up to virtually any challenge and enable me to “do the right thing” when I took a career job. I suspect that most of you feel that you also have developed a strongly held value system that will enable you to resist organizational inducements to do something

unethical. Perhaps. Unfortunately, the challenges do not often come in overt forms that shout the need for resistance or ethical righteousness. They are much

2 Ethical Principles, Quick Tests, and Decision-Making Guidelines 93

more subtle than that, and thus doubly difficult to deal with because they do not make it easy to see that a situation you are confronting might actually involve an ethical dilemma.

After school, I got the job of my dreams with Ford and, predictably enough, ended up on the fast track to promotion. That fast track enabled me to progress quickly into positions of some notable responsibility. Within two years I became Ford’s field recall coordinator, with first- level responsibility for tracking field safety problems. It was the most intense, information- overloaded job you can imagine, frequently dealing with some of the most serious problems in the company. Disasters were a phone call away, and action was the hallmark of the office where I worked. We all knew we were engaged in serious business, and we all took the job seriously. There were no irresponsible bureaucratic ogres there, contrary to popular portrayal.

In this context, I first encountered the neophyte Pinto fires problem— in the form of infrequent reports of cars erupting into horrendous fireballs in very low-speed crashes and the shuddering personal experience of inspecting a car that had burned, killing its trapped occupants. Over the space of a year, I had two distinct opportunities to initiate recall activities concerning the fuel tank problems, but on both occasions, I voted not to recall, despite my activist history and

advocacy of business social responsibility.

The key question is how, after two short years, could I have engaged in a decision process that appeared to violate my own strong values— a decision process whose subsequent manifestations continue to be cited by many observers as a supposedly definitive study of corporate unethical behavior? I tend to discount the obvious accusations: that my values weren’t really strongly held; that I had turned my back on my values in the interest of loyalty to Ford; that I was somehow

intimidated into making decisions in the best interest of the company; that despite my principled statements, I had not actually achieved a high stage of moral development; and so on. Instead, I believe a more plausible explanation for my own actions looks to the foibles of normal human information processing.

I would argue that the complexity and intensity of the recall coordinator’s job required that I develop cognitive strategies for simplifying the overwhelming amount of information I had to deal with. The best way to do that is to structure the information into cognitive “schemas,” or more specifically “script schemas,” that guide understanding and action when facing common or repetitive situations. Scripts offer marvelous cognitive shortcuts because they allow you to act

virtually unconsciously and automatically, and thus permit you to handle complicated situations without being paralyzed by needing to think consciously about every little thing. Such scripts enabled me to discern the characteristic hallmarks of problem cases likely to result in recall and to execute a complicated series of steps required to initiate a recall.

All of us structure information all of the time; we could hardly get through the workday without doing so. But there is a penalty to be paid for this wonderful cognitive efficiency: we do not give sufficient attention to important information that requires special treatment because the general information pattern has

94 Business Ethics

surface appearances that indicate that automatic processing will suffice. That, I think, is what happened to me. The beginning stages of the Pinto case looked for all the world like a normal sort of problem. Lurking beneath the cognitive veneer, however, was a nasty set of circumstances waiting to conspire into a dangerous situation. Despite the awful nature of the accidents, the Pinto problem did not fi t an existing script; the accidents were relatively rare by recall standards, and the accidents were not initially traceable to a specific component failure.

Even when a failure mode suggesting a design flaw was identified, the cars did not perform significantly worse in crash tests than competitor vehicles. One might easily argue that I should have been jolted out of my script by the unusual nature of the accidents (very low speed, otherwise unharmed passengers trapped in a horrific fire), but those facts did not penetrate a script cued for other features. (It also is difficult to convey to the lay person that bad accidents are not a particularly unusual feature of the recall coordinator’s information field. Accident

severity is not necessarily a recall cue; frequently repeated patterns and identifiable causes are.)

The Corporate Milieu

In addition to the personalized scripting of information processing, there is another important influence on the decisions that led to the Pinto fires mess: the fact that decisions are made by individuals working within a corporate context. It has escaped almost no one’s notice that the decisions made by corporate employees tend to be in the best interest of the corporation, even by people who mean to do better. Why? Because the socialization process and the overriding influence of organizational culture provide a strong, if generally subtle, context for defining appropriate ways of seeing and understanding. Because organizational culture can be viewed as a collection of scripts, scripted information processing relates even to organizational- level considerations. Scripts are context bound; they are not free- floating general cognitive structures that apply universally. They are tailored to specific contexts. And there are few more potent contexts than organizational settings.

There is no question that my perspective changed after joining Ford. In retrospect, I would be very surprised if it hadn’t. In my former incarnation as a social activist, I had internalized values for doing what was right— as I understood righteousness in grand terms, but I had not internalized a script for applying my values in a pragmatic business context. Ford and the recall coordinator role provided a powerful context for developing scripts— scripts that were inevitably and undeniably oriented toward ways of making sense that were influenced by the corporate and industry culture.

I wanted to do a good job, and I wanted to do what was right. Those are not mutually exclusive desires, but the corporate context affects their synthesis. I came to accept the idea that it was not feasible to fix everything that someone might construe as a problem. I therefore shifted to a value of wanting to do the greatest good for the greatest number (an ethical value tempered by the practical constraints of an economic enterprise). Doing the greatest good for the

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greatest number meant working with intensity and responsibility on those problems that would spare the most people from injury. It also meant developing scripts that responded to typical problems, not odd patterns like those presented by the Pinto.

Another way of noting how the organizational context so strongly affects individuals is to recognize that one’s personal identity becomes heavily influenced by corporate identity. As a student, my identity centered on being a “good person” (with a certain dose of moral righteousness associated with it). As recall coordinator, my identity shifted to a more corporate definition. This is an extraordinarily important point, especially for students who have not yet held a permanent job role, and I would like to emphasize it. Before assuming your career role,

identity derives mainly from social relationships. Upon putting on the mantle of a profession or a responsible position, identity begins to align with your role. And information processing perspective follows from the identity. I remember accepting the portrayal of the auto industry and Ford as “under attack” from many quarters (oil crises, burgeoning government regulation, inflation, litigious customers, etc.). As we know, groups under assault develop into more cohesive communities that emphasize commonalities and shared identities. I was by then an insider in the industry and the company, sharing some of their beleaguered perceptions that there were significant forces arrayed against us and that the well- being of the company might be threatened. What happened to the original perception that Ford was a socially irresponsible

giant that needed a comeuppance? Well, it looks different from the inside.

Over time, a responsible value for action against corporate dominance became tempered by another reasonable value that corporations serve social needs and are not automatically the villains of society. I saw a need for balance among multiple values, and as a result, my identity shifted in degrees toward a more corporate identity.

The Torch Passes to You

So, given my experiences, what would I recommend to you, as a budding organizational decision maker? I have some strong opinions. First, develop your ethical base now! Too many people do not give serious attention to assessing and articulating their own values. People simply do not know what they stand for because they haven’t thought about it seriously. Even the ethical scenarios presented in classes or executive programs are treated as interesting little games

without apparent implications for deciding how you intend to think or act. These exercises should be used to develop a principled, personal code that you will try to live by. Consciously decide your values. If you don’t decide your values now, you are easy prey for others who will gladly decide them for you or influence you implicitly to accept theirs.

Second, recognize that everyone, including you, is an unwitting victim of his or her cognitive structuring. Many people are surprised and fascinated to learn that they use schemas and scripts to understand and act in the organizational world. The idea that we automatically process so much information so much of

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the time intrigues us. Indeed, we would all turn into blithering idiots if we did not structure information and expectations, but that very structuring hides information that might be important— information that could require you to confront your values. We get lulled into thinking that automatic information processing is great stuff that obviates the necessity for trying to resolve so many frustrating decisional dilemmas.

Actually, I think too much ethical training focuses on supplying standards for contemplating dilemmas. The far greater problem, as I see it, is recognizing that a dilemma exists in the first place. The insidious problem of people not being aware that they are dealing with a situation that might have ethical overtones is another consequence of schema usage. I would venture that scripted routines seldom include ethical dimensions. Is a person behaving unethically if the situation is not even construed as having ethical implications? People are not necessarily stupid,

ill- intentioned, or Machiavellian, but they are often unaware. They do indeed spend much of their time cruising on automatic, but the true hallmark of human information processing is the ability to switch from automatic to controlled information processing. What we really need to do is to encourage people to recognize cues that build a “Now Think!” step into their scripts— waving red flags at yourself, so to speak— even though you are engaged in essentially automatic cognition and action.

Third, because scripts are context bound and organizations are potent contexts, be aware of how strongly, yet how subtly, your job role and your organizational culture affect the ways you interpret and make sense of information (and thus, affect the ways you develop the scripts that will guide you in unguarded moments). Organizational culture has a much greater effect on individual cognition than you would ever suspect.

Last, be prepared to face critical responsibility at a relatively young age, as I did. You need to know what your values are, and you need to know how you think so that you can know how to make a good decision. Before you can do that, you need to articulate and affirm your values now, before you enter the fray. I wasn’t really ready. Are you?

Questions for Discussion

1. The Ford Pinto met federal safety standards, yet it had a design flaw that resulted in serious injuries and deaths. Is simply meeting safety standards a sufficient product design goal of ethical companies?

2. Gioia uses the notion of script schemas to help explain why he voted to not initiate a recall of the Ford Pinto. In your opinion, is this a justifiable explanation?

3. How can organizational context influence the decisions made by organizational members?

4. If you had been in Gioia’s position, what would you have done? Why?

5. Describe the four key decision- making lessons that Gioia identifies for neophyte decision makers. Discuss how you expect or intend to use these four lessons in your own career.

2 Ethical Principles, Quick Tests, and Decision-Making Guidelines 97

Sources

This case was developed from material contained in the following sources:

Ford Pinto fuel- fed fi res. (n.d.). The Center for Auto Safety. http:// www .autosafety

.org /article .php ?scid=145 & did=522, accessed January 20, 2005.

Ford Pinto reckless hom i cide trial. HistoryChannel.com. http:// www .historychannel

.com /speeches /archive /speech 465 .html, accessed January 20, 2005.

Gioia, D. A. (May 1992). Pinto fi res and personal ethics: A script analysis of missed

opportunities. Journal of Business Ethics, 11(5– 6), 379– 390.

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