82 PART ONE Moral Philosophy and Business
3. In your view, was it wrong for the MBA
applicants to take an unauthorized peek at
their application files? Explain why you
consider what they did morally permissi-
ble or impermissible. What obligations,
ideals, and effects should the applicants
have considered? Do you think, as some
have suggested, that there is a generation
gap on this issue?
4. Did Harvard and MIT overreact, or was it
necessary for them to respond as they did
in order to send a strong message about
the importance of ethics? If you were a
business-school admissions official, how
would you have handled this situation?
5. Assess the argument that the applicants
who snooped were just engaging in the
type of bold and aggressive behavior that
makes for business success. In your view,
C ASE 2.2
The Ford Pinto
There was a time when the made in Japan
label brought a predictable smirk of superiority
to the face of most Americans. The quality of
most Japanese products usually was as low as
their price. In fact, few imports could match
their domestic counterparts, the proud pro-
ducts of Yankee know-how. But by the late
1960s, an invasion of foreign-made goods chis-
eled a few worry lines into the countenance of
U.S. industry. In Detroit, worry was fast fading
to panic as the Japanese, not to mention the
Germans, began to gobble up more and more
of the subcompact auto market.
Never one to take a backseat to the com-
petition, Ford Motor Company decided to
meet the threat from abroad head-on. In
1968, Ford executives decided to produce the
Pinto. Known inside the company as Lees
car, after Ford president Lee Iacocca, the
Pinto was to weigh no more than 2,000
pounds and cost no more than $2,000.20
are these applicants likely to make good
business leaders? What about the argument
that its really the fault of the universities
for not having more secure procedures, not
the fault of the applicants who took advan-
tage of that fact?
6. One of the applicants admits that he used
poor judgment but believes that his ethics
should not be questioned. What do you
think he means? If he exercised poor judg-
ment on a question of right and wrong,
isnt that a matter of his ethics? Stanfords
Derrick Bolton distinguishes between a
lapse of judgment and a lack of integrity.
What do you see as the difference? Based
on this episode, what, if anything, can we
say about the ethics and the character of
the curious applicants?
Eager to have its subcompact ready for the
1971 model year, Ford decided to compress
the normal drafting-board-to-showroom time
of about three-and-a-half years into two. The
compressed schedule meant that any design
changes typically made before production-
line tooling would have to be made during it.
Before producing the Pinto, Ford crash-
tested various prototypes, in part to learn
whether they met a safety standard proposed
by the National Highway Traffic Safety Ad-
ministration (NHTSA) to reduce fires from
traffic collisions. This standard would have re-
quired that by 1972 all new autos be able to
withstand a rear-end impact of 20 mph with-
out fuel loss, and that by 1973 they be able to
withstand an impact of 30 mph. The proto-
types all failed the 20-mph test. In 1970 Ford
crash-tested the Pinto itself, and the result was
the same: ruptured gas tanks and dangerous
leaks. The only Pintos to pass the test had
 CHAPTER TWO Normative Theories of Ethics 83

been modified in some wayfor example, figure of 180 deaths per year. But given that
with a rubber bladder in the gas tank or a number, how can the value of those indivi-
piece of steel between the tank and the rear duals lives be gauged? Can a dollars-
bumper. and-cents figure be assigned to a human be-
Thus, Ford knew that the Pinto repre- ing? NHTSA thought so. In 1972, it estimated
sented a serious fire hazard when struck that society loses $200,725 every time a per-
from the rear, even in low-speed collisions. son is killed in an auto accident (adjusted for
Ford officials faced a decision. Should they inflation, todays figure would, of course, be
go ahead with the existing design, thereby considerably higher). It broke down the costs
meeting the production timetable but possibly as follows:
jeopardizing consumer safety? Or should they
delay production of the Pinto by redesigning Future productivity losses
the gas tank to make it safer and thus concede Direct $132,000
another year of subcompact dominance to for- Indirect 41,300
eign companies? Ford not only pushed ahead Medical costs
Hospital 700
with the original design but also stuck to it for
Other 425
the next six years. Property damage 1,500
What explains Fords decision? The Insurance administration 4,700
evidence suggests that Ford relied, at least in Legal and court expenses 3,000
part, on cost-benefit reasoning, which is an Employer losses 1,000
analysis in monetary terms of the expected Victims pain and suffering 10,000
costs and benefits of doing something. There Funeral 900
were various ways of making the Pintos gas Assets (lost consumption) 5,000
Miscellaneous accident costs 200
tank safer. Although the estimated price of
these safety improvements ranged from only Total per fatality $200,725
$5 to $8 per vehicle, Ford evidently reasoned
that the increased cost outweighed the benefits Putting the NHTSA figures together with
of a new tank design. other statistical studies, the Ford report arrives
How exactly did Ford reach that conclu- at the following overall assessment of costs and
sion? We dont know for sure, but an internal benefits:
report, Fatalities Associated with Crash-
Induced Fuel Leakage and Fires, reveals the Benefits
cost-benefit reasoning that the company used Savings: 180 burn deaths, 180 serious
in cases like this. This report was not written burn injuries, 2,100 burned
vehicles
with the Pinto in mind; rather, it concerns fuel
leakage in rollover accidents (not rear-end col- Unit cost: $200,000 per death, $67,000
lisions), and its computations applied to all per injury, $700 per vehicle
Ford vehicles, not just the Pinto. Nevertheless, Total benefit: (180  $200,000) (180 
it illustrates the type of reasoning that was $67,000) (2,100  $700)
probably used in the Pinto case. $49.5 million
In the Fatalities report, Ford engineers Costs
estimated the cost of technical improvements Sales: 11 million cars, 1.5 million
that would prevent gas tanks from leaking in light trucks
rollover accidents to be $11 per vehicle. The Unit cost: $11 per car, $11 per truck
authors go on to discuss various estimates of
Total cost: 12.5 million  $11 $137.5
the number of people killed by fires from car million
rollovers before settling on the relatively low
84 PART ONE Moral Philosophy and Business
Thus, the costs of the suggested safety im-
provements outweigh their benefits, and the
Fatalities report accordingly recommends
against any improvementsa recommenda-
tion that Ford followed.
Likewise in the Pinto case, Fords manage-
ment, whatever its exact reasoning, decided to
stick with the original design and not upgrade
the Pintos fuel tank, despite the test results
reported by its engineers. Here is the aftermath
of Fords decision:
Between 1971 and 1978, the Pinto was
responsible for a number of fire-related
deaths. Ford puts the figure at 23; its
critics say the figure is closer to 500. Ac-
cording to the sworn testimony of Ford
engineers, 95 percent of the fatalities
would have survived if Ford had located
the fuel tank over the axle (as it had done
on its Capri automobiles).
NHTSA finally adopted a 30-mph colli-
sion standard in 1976. The Pinto then ac-
quired a rupture-proof fuel tank. In 1978
Ford was obliged to recall all 19711976
Pintos for fuel-tank modifications.
Between 1971 and 1978, approximately
fifty lawsuits were brought against Ford
in connection with rear-end accidents in
the Pinto. In the Richard Grimshaw case,
in addition to awarding over $3 million in
compensatory damages to the victims of a
Pinto crash, the jury awarded a landmark
$125 million in punitive damages against
Ford. The judge reduced punitive damages
to $3.5 million.
On August 10, 1978, the 1973 Ford Pinto
that eighteen-year-old Judy Ulrich, her
sixteen-year-old sister Lynn, and their
eighteen-year-old cousin Donna were rid-
ing in was struck from the rear by a van
near Elkhart, Indiana. The gas tank of the
Pinto exploded on impact. In the fire that
resulted, the three teenagers were burned
to death. Ford was charged with criminal
homicide. The judge in the case advised
jurors that Ford should be convicted if it
had clearly disregarded the harm that
might result from its actions, and that dis-
regard represented a substantial deviation
from acceptable standards of conduct. On
March 13, 1980, the jury found Ford not
guilty of criminal homicide.
For its part, Ford has always denied that
the Pinto is unsafe compared with other cars
of its type and era. The company also points
out that in every model year the Pinto met or
surpassed the governments own standards.
But what the company doesnt say is that suc-
cessful lobbying by it and its industry associ-
ates was responsible for delaying for seven
years the adoption of any NHTSA crash stan-
dard. Furthermore, Fords critics claim that
there were more than forty European and Jap-
anese models in the Pinto price and weight
range with safer gas-tank position. Ford
made an extremely irresponsible decision,
concludes auto safety expert Byron Bloch,
when they placed such a weak tank in such
a ridiculous location in such a soft rear end.
Has the automobile industry learned a les-
son from Fords experience with the Pinto?
Some observers thought not when twenty
years later an Atlanta jury held the General
Motors Corporation responsible for the death
of a Georgia teenager in the fiery crash of one
of its pickup trucks. Finding that the company
had known that its side-saddle gas tanks,
which are mounted outside the rails of the
trucks frame, are dangerously prone to rup-
ture, the jury awarded $4.2 million in actual
damages and $101 million in punitive da-
mages to the parents of the seventeen-year-
old victim, Shannon Moseley.
After the verdict, General Motors said
that it still stood behind the safety of its trucks
and contended that a full examination by the
National Highway Traffic Safety Administra-
tion of the technical issues in this matter will
bear out our contention that the pickup
trucks do not have a safety related defect.
Subsequently, however, the Department of
Transportation determined that GM pickups

of the style Shannon Moseley drove do pose a
fire hazard and that they are more prone than
competitors pickups to catch fire when struck
from the side. Still, GM rejected requests to
recall the pickups and repair them, and later
the Georgia Court of Appeals threw out the
jurys verdict on a legal technicalitydespite
ruling that the evidence submitted in the case
showed that GM was aware that the gas tanks
were hazardous but, to save the expense in-
volved, did not try to make them safer.
Expense seems to be the issue, too, when it
comes to SUV rollovers. After nearly three hun-
dred rollover deaths in Ford Explorers equipped
with Firestone tires in the late 1990s, Congress
mandated NHTSA to conduct roll-over road
tests on all SUVs. (Previously, the agency had
relied on mathematical formulas based on acci-
dent statistics to evaluate rollover resistance,
rather than doing real-world tests.) In August
2004 NHTSA released its results, and they wer-
ent prettyat least not for several of Detroits
most popular models. The Chevrolet Tahoe and
the Ford Explorer, in particular, have between a
26 and a 29 percent chance of rolling over in a
single-vehicle crash, almost twice that of models
from Honda, Nissan, and Chrysler. The Saturn
Vue couldnt even finish the test because its left-
rear suspension broke, leading General Motors
to recall all 250,000 Vues.
Ford and General Motors have the anti-
rollover technology necessary to make their
SUVs safer. The problem is that rollover sen-
sors and electronic stability systems add about
$800 to the price of a vehicle, so the compa-
nies have offered them only as options. The
same is true of side-curtain airbags to protect
occupants when a vehicle rolls over. They cost
about $500. Improved designwider wheel
tracks, lower center of gravity, and reinforced
roofs to protect passengers in a rollover
would also help. Embarrassed by the test re-
sults, the companies promised to make more
safety features standard equipment on new
SUVs. Lawsuits by rollover victims are also
prodding the companies to enhance their
CHAPTER TWO Normative Theories of Ethics 85
commitment to safety. Two months before
NHTSA released its results, Ford had to pay
$369 million in damagesone of the largest
personal-injury awards ever against an auto-
makerto a San Diego couple whose Ex-
plorer flipped over four-and-a-half times
when they swerved to avoid a metal object
on the highway.
Discussion Questions
1. What moral issues does the Pinto case
raise?
2. Suppose Ford officials were asked to jus-
tify their decision. What moral principles
do you think they would invoke? Assess
Fords handling of the Pinto from the per-
spective of each of the moral theories dis-
cussed in this chapter.
3. Utilitarians would say that jeopardizing
motorists does not by itself make Fords
action morally objectionable. The only
morally relevant matter is whether Ford
gave equal consideration to the interests
of each affected party. Do you think
Ford did this?
4. Is cost-benefit analysis a legitimate tool?
What role, if any, should it play in moral
deliberation? Critically assess the example
of cost-benefit analysis given in the case
study. Is there anything unsatisfactory
about it? Could it have been improved
upon in some way?
5. Speculate about Kants response to the
idea of placing a monetary value on a hu-
man life. Is doing so ever morally
legitimate?
6. What responsibilities to its customers do
you think Ford had? What are the most
important moral rights, if any, operating
in the Pinto case?
7. Would it have made a moral difference if
the savings resulting from not improving
the Pinto gas tank had been passed on to
Fords customers? Could a rational cus-
tomer have chosen to save a few dollars
and risk having the more dangerous gas
86 PART ONE Moral Philosophy and Business
tank? What if Ford had told potential cus-
tomers about its decision?
8. The maxim of Fords action might be
stated thus: When it would cost more to
make a safety improvement than not, its
all right not to make it. Can this maxim
be universalized? Does it treat humans as
ends in themselves? Would manufacturers
be willing to abide by it if the positions
were reversed and they were in the role of
consumers?
9. Should Ford have been found guilty of
criminal homicide in the Ulrich case?
10. Was GM responsible for Shannon Mose-
leys death? Compare that case with the
case of Ford and the Pinto.
C ASE 2.3
Blood for Sale
Sol Levin was a successful stockbroker in
Tampa, Florida, when he recognized the po-
tentially profitable market for safe and uncon-
taminated blood and, with some colleagues,
founded Plasma International. Not everybody
is willing to make money by selling his or her
own blood, and in the beginning Plasma Inter-
national bought blood from people addicted
to drugs and alcohol. Although innovative
marketing increased Plasma Internationals
sales dramatically, several cases of hepatitis
were reported in recipients. The company
then began looking for new sources of
blood.21
Plasma International searched worldwide
and, with the advice of a qualified team of
medical consultants, did extensive testing.
Eventually they found that the blood profiles
of several rural West African tribes made them
ideal prospective donors. After negotiations
with the local government, Plasma Interna-
tional signed an agreement with several tribal
chieftains to purchase blood.
11. Assess Fords and GMs actions with respect
to SUV rollovers. Have the auto-makers met
their moral obligation to consumers, or have
they acted wrongly by not doing more to
increase SUV safety? Should they be held
either morally or legally responsible for
deaths from roll-overs that would not have
occurred in other vehicles? What should
automakers do to increase SUV safety?
12. Is it wrong for business to sell a product
that is not as safe as it could be, given
current technology? Is it wrong to sell a
vehicle that is less safe than competing
products on the market? Are there limits
to how far automakers must go in the
name of safety?
Business went smoothly and profitably for
Plasma International until a Tampa paper
charged that Plasma was purchasing blood
for as little as fifteen cents a pint and then
reselling it to hospitals in the United States
and South America for $25 per pint. In one
recent disaster, the newspaper alleged, Plasma
International had sold 10,000 pints, netting
nearly a quarter of a million dollars.
The newspaper story stirred up contro-
versy in Tampa, but the existence of commer-
cialized blood marketing systems in the United
States is nothing new. Approximately half the
blood and plasma obtained in the United States
is bought and sold like any other commodity.
By contrast, the National Health Service in
Great Britain relies entirely on a voluntary sys-
tem of blood donation. Blood is neither bought
nor sold. It is available to anyone who needs it
without charge or obligation, and donors gain
no preference over nondonors.
In an important study, economist Richard
Titmuss showed that the British system works