PintoCase1 - Jocelyn Ford Mgmt 368 Maddox 7 October 2009...

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Jocelyn Ford Mgmt 368 Maddox 7 October 2009 The Case of the Ford Pinto In the late sixties Ford Motor Company began debating the issue of whether they should enter into the market of providing a low cost compact car. Currently the market for producing low cost compact cars was held by Japan with its introduction of the Volkswagen Beetle. Current president Semon "Bunky" Knudsen, whom Henry Ford II had hired away from General Motors, and Vice President Lee Iacocca, a spunky Young Turk who had risen quickly within the company on the enormous success of the Mustang (Dowie) . Iacocca argued forcefully that Volkswagen and the Japanese were going to capture the entire American subcompact market unless Ford set out its own alternative to the VW Beetle. Bunky Knudsen said, in effect: let them have the small-car market; Ford makes good money on medium and large models. But he lost the battle and later resigned. Iacocca became president and almost immediately began a rush program to produce the Pinto. The Pinto became a special project of Lee Iacocca. He gave stringent guidelines to his engineer department as to the specifications for the Pinto. The product objectives for the Pinto were true compact, low cost of ownership and clear product superiority. Further guidelines included the Pinto was not to weigh an ounce over 2,000 pounds and not to cost a cent over $2,000. "Iacocca enforced these limits with an iron hand. In addition the Pinto was to be introduced as a part of the 1971 model line up. Normal production time was 43 months but the production time for introducing the Pinto was 25 months. This 18 month decrease in production time required the engineers to conduct Pinto tooling at the same time as product development. Tooling is the process of creating car parts. So when crash tests revealed a serious defect in the gas tank, it was too late. The tooling was well under way. Ford had to make a decision on whether to replace the gas tank or redesign it or to continue
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PintoCase1 - Jocelyn Ford Mgmt 368 Maddox 7 October 2009...

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