Corporate responsibility

Written By: - Date published: 4:07 pm, May 1st, 2008 - 5 comments
Categories: articles, youtube - Tags: , , ,

Anyone remember the Pinto? Arguably not Ford’s finest hour. When in 1968 it became apparent that the Pinto’s defective fuel tank could result in the car catching fire when hit from behind, Ford executives reached for their calculators.

Some quick sums (from a leaked memo) showed that the costs of fixing the Pinto were around $150 million, while settling cases where injuries occurred was likely to total closer to $65 million.

Striving to maximise shareholder profit, Ford executives allegedly chose to continue to manufacture the defective cars, at a saving of around $14 per car, and instead pay out on the expected death and injury lawsuits. Ford avoided criminal charges but, predictably, the memo did a lot of harm to their brand.

Fast forward to today (and only 27 Pinto-deaths later) and Mazda, in which Ford has a controlling interest, is faced with a not dissimilar problem. On the face of it, they appear to have learnt from the Pinto case. They’re busy pioneering ‘accelerated destruction methods’ for nearly 5000 brand new, but suspect, vehicles.

It all started about two years ago, when a ship carrying 4,703 shiny new Mazdas nearly sank in the Pacific. The freighter, the Cougar Ace, spent weeks bobbing on the high seas, listing at a severe 60-degree angle, before finally being righted.

The mishap created a dilemma: What to do with the cars? They had remained safely strapped down throughout the ordeal — but no one knew for sure what damage, if any, might be caused by dangling cars at such a steep angle for so long. Might corrosive fluids seep into chambers where they don’t belong? Was the Cougar Ace now full of lemons?

The Wall St Journal has the full story.

5 comments on “Corporate responsibility”

  1. randal 1

    I dont own a car nor do I ever want to own one so I couldnt possible comment

  2. Phil 2

    You forgot the other structural defect on the Pinto; when in accidents (even minor fender-benders) the doors had a tendancy to warp and jam shut. Burning fuel-tank plus jammed doors… nasty

    Sadly, I think what this article shows is just how fearful companies are of American litigation. I doubt there is anything structurally wrong with those cars (a quick service check by the AA would confirm that) but can you imagine the precedent set if someone were to successfully able to sue Mazda in the event of an accident in one of those vehicles?

  3. seems so wasteful, how could the wheels and tires possibyly be damaged? what about the interior? the windows? rear portion of the exhaust?

  4. Matthew Pilott 4

    It shows an interesting set of priorities (and realities!). Their brand image is so important that they won’t risk anything damaging it, so they can’t let the car be sold for any purpose in case something bad happens. So to prevent damange to their brand image, they’re wasting an incredible amount of resources and prduction. Which does what… damages the brand image? Makes them look prodent?

    In my mind I don’t know what’s worse. Couldn’t they donate them to Nauru? Make funky lounge furniture? Volvo made wine racks from engine blocks…

  5. There is a wicked video for this of the team that actually righted the container ship. They got paid 15m to do it. They are one of only 4 crews in the world that can take on such a job as this. One of their men actually died on this one.

    Will try to find the video as it’s pretty awesome.

Recent Comments

Recent Posts

  • Swiss tax agreement tightens net
    Opportunities to dodge tax are shrinking with the completion of a new tax agreement with Switzerland, Revenue Minister Stuart Nash announced today. Mr Nash and the Swiss Ambassador David Vogelsanger have today signed documents to update the double tax agreement (DTA). The previous DTA was signed in 1980. “Double tax ...
    1 week ago
  • Maintaining momentum for small business innovation
    Small Business Minister Stuart Nash says the report of the Small Business Council will help maintain the momentum for innovation and improvements in the sector. Mr Nash has thanked the members of the Small Business Council (SBC) who this week handed over their report, Empowering small businesses to aspire, succeed ...
    2 weeks ago
  • Seventy-eight new Police constables
    Extra Police officers are being deployed from Northland to Southland with the graduation of a new wing of recruits from the Royal New Zealand Police College. “The graduation of 78 constables today means that 1524 new constables have been deployed since the government took office,” says Police Minister Stuart Nash. ...
    2 weeks ago
  • Tax refund season ends near $600 million
    Almost $600 million has been paid into taxpayers’ bank accounts in the past two months, after the first season of automatic tax assessments. Revenue Minister Stuart Nash says the completion of this year’s tax refund season is a significant milestone. “The ability of Inland Revenue to run auto calculations for ...
    3 weeks ago