I’m not someone who faults people or organizations for making mistakes. We all make mistakes. But what I find appalling, is the continued and unabated nature of so many businesses – usually big business – to ever learn from those mistakes – and to deal honestly with the consuming public and the government about defective products they have manufactured.
While there are legions of examples of corporations who designed, manufactured or marketed dangerously defective products, Exhibit A in this list has always been Ford Motor Company. If you’re wondering why, think of this word: Pinto. Some forty years ago, Ford manufactured a small, 2-door coupe with a 4 cylinder engine, called the Pinto. Not too bad a car, except for one glaring problem, unknown to the car-buying public: The gas tanks on this car were built dangerously close to the rear bumper, which was only cosmetic to begin with. There were bolts that were placed immediately behind the rear bumper, which with the slightest impact (as low as 5 MPH,) would puncture the gas tank like a nail gun. The result? An extremely high risk that the gas tank would explode, turning the car into a fiery death trap. Subsequent lawsuits and a government investigation later proved that Ford knew about this dangerous product defect, yet made a conscious ‘business decision’ to do nothing about because correcting the problem would have cost it ‘too much money.’ USA Today talks about the history of the Pinto here.
That was about 40 years ago. You’d think that corporate culture and safety practices would change over almost a half century, right? Wrong.
It appears that Ford has driven itself into yet another public relations nightmare, with the announcement just yesterday that the National Highway and Transportation Safety Administration (NHTSA,) has slapped Ford with a whopping $17 million in fines, for failing to report product safety defects on its Escape SUV’s. About a year ago, NHTSA began an investigation into reports of gas pedals sticking on Ford’s Escape SUV’s. That investigation followed a serious accident caused by the Escape’s gas pedal sticking down at the floor level. You can imagine what happens when that occurs: Yes, the vehicle would suddenly accelerate at maximum speed, as it would if the driver “floored it” all the way down. A week after the investigation began, Ford issued a voluntary recall, claiming (and I emphasize “claiming”,) that it had already begun its own internal inquiry before it got NHTSA’s notice. NHTSA apparently didn’t buy that answer, so it began digging deeper at Ford.
And what did HNTSA investigators find out? You guessed it: That Ford knew about the gas pedal safety issue long before NHTSA intervened, yet they hid this dangerous product defect from the public and the government. Federal law mandates that automobile manufacturers inform NHTSA of any safety issues within five days of discovering that a safety risk exists. Ford failed to do that, and that’s why it’s now being slammed with a $17 million fine. Technically, the fine played out as follows: After NHTSA became suspicious of Ford’s answers about why it never informed the government of this product defect, it informed Ford that the agency was going to commence a “timeliness” investigation. Translation: We think you’re lying to us and we’re going to come in and dig deeper. At that point, Ford then agreed to pay the maximum fine over opting to wait for that investigation to commence. The fine, which is the highest allowable for any single violation, is the same amount that Toyota paid last year for failing to quickly recall vehicles in which gas pedals became stuck in floor mats. CnnMoney reported on this news.
In my long experience as a Boston dangerous products lawyer, I’ve seen this corporate whitewash a hundred times. It’s pure damage control, pure spin. Beyond the injuries and deaths that occur nationally, the Massachusetts defective products cases that have caused serious injuries and deaths is extremely high. Why these companies never learn, is a mystery to me. Beyond financial metrics, it would seem to me that simple morality would yield the correct answer in these decision-making situations.
But morality and corporate operations, very rarely operate at the same time.