The Ford Pinto

“The Ford Pinto—the barbecue that seats four.” –Johnny Carson

This month, February 2018, will be the 40th anniversary of the California jury verdict in the Grimshaw v. Ford Motor Co. case. The jury awarded Richard Grimshaw $2,516,000 in compensatory damages and $125,000,000 in punitive damages, although the trial judge reduced the punitive damages to $3,500,000. Grimshaw, a minor at the time of the accident, was severely burned and permanently disfigured when the Ford Pinto he was riding in was rear-ended and the leaking fuel tank caught on fire.  The driver, Lily Gray, died in the accident; her heirs were awarded $559,680 in compensatory damages.

The media has been referring to the Ford Pinto as “the barbecue that seats four” ever since. Worse, the media, advocates, and politicians still refer to a document now known as the Pinto Memo as the basis for condemning Ford for a callous disregard for human life in favor of corporate profits. We know better, if we want to, but the myth is too convenient to set aside. Unfortunately, the myth is also the reason that many hesitate to perform risk assessments.

The Myth

Most of the outrage surrounding the Ford Pinto centers on the notion that it was particularly vulnerable to fuel tank fires and that Ford designers knew this. Moreover, there is a myth that there was an inexpensive fix for the problem—$11—and that Ford executives determined that the value of the lives saved was less than the lost profits from implementing this fix. Specifically, Ford executives are accused of estimating that the design defects in the Ford Pinto would result in hundreds of deaths and that the legal liability would be around $200,000 per death, so it was cheaper to “let ‘em burn.”

The Machine

The Ford Pinto was a sub-compact, one of several models rushed to market by auto makers in response to the gas crisis of the early 1970s. Its key design objectives were fuel economy and low cost, meaning that it was small and stripped of components that added weight. At Ford, the objectives were expressed as 2000/2000: the car should weigh less than 2,000 lbs and cost less than $2,000. It was accepted as a given that a car in this class would not be as crashworthy as the land yachts that Americans were accustomed to driving.

One of the design features of all subcompacts was reduced weight in bumpers. Naturally, the bumpers were not as effective.  Another design feature that all auto makers wrestled with was whether to place the fuel tank behind the axle or above the axle. When behind the axle, the tank was vulnerable to being crushed against the rear axle differential and punctured during a rear-end collision.  Above the axle and the fuel tank was more vulnerable to side impacts, leaking fuel was more likely to enter the passenger compartment, and the resulting higher center of gravity made the car more vulnerable to rollovers. Tipping the scale for Pinto designers was that putting the fuel tank above the axle made the car less useful for consumers because it would result in less trunk space and make hatchbacks impossible. They put the Pinto fuel tank behind the axle.

In the 1970s, seven car models comprised the subcompact market:  AMC Gremlin, Chevrolet Vega, Datsun 510, Datsun 1200/210, Ford Pinto, Toyota Corolla, and VW Beetle. Subcompacts were not as safe as full-sized cars, regardless of the maker. When ranked by fatalities per million vehicles, the Pinto was not the worst subcompact; that dubious honor goes to the Beetle and the Corolla.  The Pinto, although not the best, was better than average.

So why was the Ford Pinto singled out for such vitriol and scorn?

The Memo

Production of the Pinto began in August 1970. In August 1973, the National Highway Transportation Safety Administration (NHTSA) proposed a new standard related to vehicle rollovers. Regulatory specialists at Ford wrote a report for the NHTSA explaining why they believed the new standard was a bad idea. The new standard would require that auto makers install a safety valve to prevent fuel spillage in a rollover, increasing the cost of automobiles to consumers. Assuming that the safety valve worked as intended, it would decrease the likelihood of death in those cases where a rollover resulted in a fire from which the vehicle occupants could not escape.

The memo considered the entire fleet of cars and light trucks in the United States, not just Ford products.  It never once mentioned the Ford Pinto.  Likewise, the memo was about rollovers, not rear-end collisions. The memo included a cost-benefit analysis, using the cost of the safety valve on the one hand and a life-value figure published by NHTSA on the other hand.  Also, the memo was sent to a Federal agency, making it part of the public record, not a secret internal memo. Finally, the memo was written more than three years after the Pinto went into production, long after the Pinto’s design was complete.

Yet much of the acrimony about the Ford Pinto hinges on the infamous Pinto Memo where, as the story goes, “Ford decision-makers made an informed and deliberate decision not to modify the design, because doing so would harm corporate profits. Ford’s decision was based on the results of a cost-benefit analysis contained in the notorious ‘Pinto Memo,’ written by Ford engineers to guide design decisions.”

The Math

The memo compared two sets of calculations, one for benefits to society of the rollover standard and one for the costs to society of implementing the rollover standard.

The benefits to society assumed that 180 deaths per year would be avoided, 180 injuries per year would be avoided, and 2,100 vehicles per year would not be totaled. The calculation used a value of life published by the NTSHA of $200,000 and a cost of injury of $67,000.  The calculation assumed the cost of a vehicle loss would be $700.  Remember, the scenario being considered was a fire following a rollover; the rollover was assumed to have happened already.  Also, remember that these costs are in 1973 dollars.

The estimated benefits to society:

180 deaths avoided per year x $200,000 per death = $36,000,000/year

180 injuries avoided per year x $67,000 per injury = $12,060,000/year

2,100 destroyed vehicles avoided per year x $700 per vehicle = $1,470,000/year

Total = $49,530,000/year

The costs to society were $11 per vehicle.  This is a cost to society, because manufacturing costs are passed along to the consumer, especially when they apply to the entire market.  Because there was no way to know in advance which vehicles are going to be involved in a rollover followed by a fire, every car and truck manufactured for sale in the U.S. would require this fix.  Not just Pintos, not just Fords, but every vehicle in the U.S.  The memo estimated there were 12.5 million cars and trucks per year subject to the new standard.

The estimated costs to society:

12,500,000 vehicles per year x $11 per vehicle = $137,500,000/year

Ford calculated that the rollover standard would cost society almost three times more to implement than it would benefit society.

It is important to note that it is always easier to estimate the cost of a safety measure than the benefit of a safety measure.  Much has been made of the Ford’s (actually the NHTSA’s) value of life of “only $200,000”.  Nowadays, no one would use discounted future earnings as a basis for placing an economic value on a statistical human life.  Since the 1970s, economists have studied the question extensively and have developed more accepted methods. Viscusi summarized several studies and concluded that the Value of a Statistical Life (VSL) was in the range of $4 million to $10 million. In a 2011 article, the New York Times compared the VSLs used by three different federal agencies:

$9.1 million – Environmental Protection Agency

$7.9 million – Food and Drug Administration

$6.0 million – Department of Transportation

While it is curious that they are not the same, they are all in the range that economists have estimated.

In addition to unit values, another difficulty in estimating benefits is in estimating the number of units.  Ford estimated the number of deaths at 180 per year.  The author of the Mother Jones article that thrust the “Pinto memo” into the national limelight estimated that the number of burn deaths from Pintos alone was 500. Not satisfied with the news value of 500 burn deaths, CBS’s 60 Minutes used an estimate of 2,000 deaths.

In fact, NTHSA data showed that for 1971-77, there were 38 rear-end collisions of Pintos that resulted in fire, leading to 27 deaths and 24 non-fatal burn injuries. During the same period, Ford produced 2,600,000 Pintos.

Using values and units that are more consistent with what we know today, and assuming that Ford could have actually arrived at a fix for rear-end Pinto collisions that only cost $11, the cost-benefit analysis would look different.

The estimated benefits to society:

27 deaths avoided per 7 years x $7,000,000 per death = $27,000,000/year

24 injuries avoided per 7 years x $700,000 per injury = $2,400,000/year

Total = $29,400,000/year

The estimated costs to society:

2,600,000 vehicles per 7 years x $11 per vehicle = $4,086,000/year

The analysis favors an $11 fix that solves the problem, if one could be found.  It favors an $80 fix that solves the problem. It argues against a fix that takes $100 to solve the problem and certainly against a fix that takes $1,000 to solve the problem.

The Message

There is much to fault Ford for regarding its handling of the Grimshaw case. It didn’t take it seriously, nor understand the depth of animosity it faced. It lost. Later, when an Indiana state prosecutor charged Ford with criminal recklessness and reckless homicide for the Pinto, Ford took it quite seriously and Ford prevailed.  But these are legal questions.  Lawyers are concerned with liability.  Engineers are concerned with safety.

At issue for engineers is whether risk assessments and cost-benefit analyses are appropriate when considering safety.  The answer must be yes. Resources are finite, and they must be allocated. If not through a rational analysis, they will be allocated based on a visceral, emotional response to feelings. Despite the American public’s declared horror that Ford had presumed to put a value on a human life, the real issue was that Ford had put the wrong value on a human life. The fault was not in the analysis, but in the risk tolerance criteria.

Moving Forward

As a kid, I heard the jokes about the Pinto and grew up believing the myth, the myth that is still so widespread.  It was only recently, when someone mentioned the Ford Pinto case as an argument against risk assessments that I examined it further. Two documents were particularly helpful: Ethics: An Alternative Account of the Ford Pinto Case, by Mark P. Rossow, and The Myth of the Ford Pinto Case, by Gary T. Schwartz.  If you are interested in the Pinto case, these are excellent resources.

In the meantime, continue to perform risk assessments and cost-benefit analyses. There is no other rational way to assure that finite resources are allocated well. Keep in mind, however, that following an incident there is no such thing as an “internal” document. Your analyses and your risk tolerance criteria will become public. Perform your assessments and analyses as though the public is looking over your shoulder.  They are.

By | 2018-02-08T14:38:29+00:00 February 8th, 2018|Current Events, Risk Assessment|0 Comments

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