Ford memo: the smoking gun

posted on:
May 5, 2009

author:
Wendi Lewis

The Ford Pinto is a car that became notoriously associated with fuel-fed crash fires in the late 1960s and early 1970s, when the compact vehicle showed a propensity for catching fire when involved in even low-speed crashes. In 1977, an internal memo revealed that Ford was aware of design problems with the Pinto that made it more susceptible to crash-related fires, but that it had deemed the overall benefits of redesigning the automobile – which included preventing an average of 180 deaths each year – to be not worth the cost – an estimated $11 per automobile.

Company documents showed that crash testing revealed that although the Pinto’s gas tank was positioned according to industry standards at the time, in the Pinto it was situated in such a way that studs protruding from the rear axle would puncture the gas tank in the event of a crash. Test results showed that fuel leaks were common in the Pinto in any of the other four basic crash types – frontal, side, rear and rollover. In particular, more than one quarter of all rear impacts produced a fuel leak that could result in a fire and a fatality. Out of 11 test crashes, only three cars survived, and they had the fuel tanks modified prior to testing.

Ford had a decision to make. Its car was in compliance with industry standards of the time, so it was not breaking any laws. But its own research had proved the car was unsafe, and even deadly.

The manufacturer implemented a now-notorious “cost-benefit analysis,” estimating a National Highway Traffic Safety Administration approved figure of $200,000 “cost to society” for each estimated fatality, versus an estimated $11 per vehicle production cost to modify the design and location of the fuel tank. Figures showed the repairs for a projected 11 million cars and 1.5 million light trucks that also featured the faulty tank design would cost the company $137 million.

Ford estimated “benefits” resulting from design modification would include the prevention of 180 burn deaths, 180 serious burn injuries and 2,100 burned vehicles, at a savings of $200,000 per death, $67,000 per serious injury and $700 per injury. Total benefit was estimated at $49.5 million.

Because the estimated cost of repairs was about 2.5 times the estimate of the resulting benefits, Ford chose to do nothing, putting its profits above the value of human life.

This is not the first time such cold-blooded calculations have been revealed in the auto manufacturing industry. Last year, we brought you a very similar story that revealed how automobile manufacturer General Motors, in 1973, determined the cost of repairing its automobile design to prevent fuel-fed fires would cost more than compensating families who lost loved ones in a crash. As a result, they decided not to make fundamental changes to the location of the fuel tanks in their cars to protect consumers, choosing instead to gamble on the likelihood of fire deaths from crashes.

The memo, dubbed the Ivey Memo for its author, engineer Edward C. Ivey, was buried by GM until 1998, when it finally came to light during a Florida trial involving two children who burned to death when the station wagon in which they were riding caught fire after a crash.

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