Serious Business: Part One

by Dan Greco

Follow @DVGreco

Serious Business is a two-part segment about some real shady stuff. Go ahead and put your conspiracy cap on for this one. Part Two next week...

In 1969, the Ford Motors team, led by CEO Lee Iacocca, used a cost-benefit analysis to calculated the value of life (in their eyes).  In an effort to penetrate the compact car market, Ford mass-produced 12.5 million vehicles called the Pinto prior to testing it.  The Pinto failed 37/40 crash tests due to a flaw in the location of the gas tank, which caused the vehicle to become engulfed in flames in almost every event of a rear collision. Ford used the cost-benefit analysis to determine if they should fix the location of the tank or not.  Ford estimated the number of deaths, injuries, and vehicle damages then multiplied it by the victim benefit estimates provided by the National Highway Traffic Safety Association.  When compared to the cost to fix each vehicle’s gas bladder ($11), Ford found it was $88 million cheaper to leave the Pinto as it was.

Benefit:               (180 deaths)($200,000) + (180 injuries)($67,000) + (2,100 vehicles)($700) = $49.5 million

Cost:                      (12.5 million cars and trucks)($11) = $137.5 million

                The Pinto caused 27 deaths from gas tank explosions before it was recalled.  In the case Grimshaw vs Ford Motor Co., 13 year old Richard Grimshaw was awarded $6 million in cumulative compensatory and punitive damages after being severely burned and watching his mother perish in front of him.  I’m unsure if the cost-benefit analysis worked after the lawsuits from the injuries and casualties derived from the Pinto’s flaws, but the point of this example was to point out how big business thinks. If it weren’t for a Ford engineer whistleblowing, this car would have been a recall just like any other car with a problem (although it’s significantly more tragic). 

                The only difference between big business and big government is that the government has the strength, size, and wealth to conceal anything they wish with no third party regulating agencies like the BBB or FDA.  I like to think of the American government like a spider web.  The outside is thin, lined with local governments, and somewhat penetrable.  Moving towards the center is the state governments and the center being the federal government that is the foundation of our nation’s dominance.  The principle: No one can get through and no information gets out. All you have to be is rational: put yourself in the shoes of our nations leaders (how do we create jobs? Increase GDP?), but many people don’t care. If you are one of those people, feel free to stop reading now and continue believing everything you hear.  

                My Theory: if something makes perfect business sense (creates more revenue), and there is no visible way for the public to prove that the revenue stream is illegal, unethical, or wrong, the business will take advantage.  To quote one of my favorite movies, “What mama don’t know, won’t hurt her,” (Coach Kline, Waterboy) and in this case “mama” is the United States public. The question is…what don’t we know?