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sect16_pros_memo - SECTION 16 CORPORATE CRIMINALITY...

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S ECTION 16: C ORPORATE C RIMINALITY N OVEMBER 9, 2006 P RIMARY C ASE IN S ECTION : F ORD M OTOR C OMPANY Key Facts: - Ford, by 1978, had sold almost 2 million Pintos – a car that had proven to be a major problem for Ford - The development of the car was rushed - President of Ford, Lee Iacocca, insisted that the car be under 2000 lbs and less than $2000 o This proved difficult for engineers - The Pinto passed all federal regulations but didn’t fare well in rear-end collisions o Leading to more than 50 civil suits - Article published in Sept 1977 by Mark Dowie o Ford knew that the Pinto gas tank was unsafe o Failed every collision test when the gas tank was not altered using one of 3 simple methods - A Ford engineer said that even though they knew the car was unsafe, no one would tell Iacocca, who had been the driving force behind the speedy production of the Pintos o Not open to problems raised - Cost benefit analysis to evaluate the costs of the Pinto casualties o Human life worth is $200, 275 o Estimated 180 fiery deaths, 180 serious burn injuries, and 2100 burned vehicles o Damages estimated at $49.5 million - Formal recall issued in June 1978 o Takes a few months to get all the letters out - Judy, Donna, and Lyn Ulrich were from the small community of Elkhart County, Indiana o Weren’t aware of the Pinto recall o Traveling down the road after leaving the gas station, gas cap on top of her. o Gas cap flies off the roof of the car, and Judy waits until it seems safe to make a U-turn, put on her hazards , and get the cap. o Drives slowly towards the lost cap unable to pull over as a result of the 8 inch curb - Robert Duggan is driving down Highway 33 under the 55 mph speed limit o Trying to be more careful after getting his license back after its suspension o Reaches down to grab a pack of cigarettes that has fallen to the floor and when he looks up the Pinto is 10 feet ahead - He hit the Pinto going at approx. 30 mph 1
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- Slams into back of Pinto - Gas spills, back is crumpled, can only withstand collisions of 5 – 10 mph - Spark ignites the gas, huge explosion results - Dashboard and steering wheel melt, backseat engulfed by a “solid mass of orange flame” -
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