[PEN-L:5160] Re: the exploding Pinto and Gingrich

[glevy@xxxxxxxxxxxxxxx]

I don't have an exact figure to give in answer to Doug Orr's question but
I do have a very interesting story to tell concerning exploding Pintos.
In the period 1978-79, I worked as an assembler at Ford Motor Company's
Metuchen (New Jersey) Assembly Plant where we built Ford Pintos and
Mercury Bobcats.  Anyway, I worked mostly on the rear underbody line in
the Chasis Department.  The person who installed gasoline tanks, who was
a UAW Local 980 official, told me that he was told by an engineer about
the problem BEFORE they built the first Pinto.  My friend asked the engineer:
"For God's sake, if you know there's a problem, why don't you fix it
now?"  The engineer told him that they had costed out how much money it
would cost to change the design (I believe he said 50 cents per car) and
management determined (multiplying 50 cents times X-many million Pintos
that the Company planned to sell) that the cost was too high!

I often think of this story when I hear about externalities and the
arguments for and against deregulation.

On Fri, 19 May 1995, DOUG ORR wrote:

> It is amazing how pieces of important info. slip away.  Gingrich wants to
> limit the maximum product liability award to $250,000.  If I remember correctly,
> when Lee Iaccoca wrote his memo deciding to continue to sell Pintos that he
> knew would explode into flames in a collision, he used an estimate of
> $250,000 per affected car as a likely settlement amount and concluded that
> at that cost, it would be more cost effect to let people burn.  Does anyone
> out there remember the exact amount he used in his calculations?
>
> Thanks,
> Doug Orr
> dorr@xxxxxxx
>
>