Ford Pinto Case Study

In the late 1960’s Ford Motor Company (Ford) was faced with server competition. In a move to increase the company’s competitive position, and tap into new markets, then chairman Lee Iacocca approved the development of a new car. The specifications called for a car to not weigh more than 2000 pounds, cost less than $2000 dollars, and finally be developed in record time. Ford Engineers began their duties and in 25 months the Ford Pinto was on showroom floors for sale in 1971.
During the development of the Pinto, Ford and other automakers faced increased safety requirements for the Federal Government and consumer groups. Ford followed the Federal safety standards as they where current written. When the vehicle was developed the standard for rear-end impact worthiness was the 20 miles per hour (mph) moving barrier test. Stated simply, the car being tested was hit by a barrier moving at 20 mph. Test conducted using this test showed that the Pinto passed, having statistically identical performance grades as other sub-compact cars of equal weight. The matrix in question for the Pinto was gas leakage. When hit by the barrier, how much fuel leaked from the car? Again, Fords t

The final portion of implied warranties states that the seller has legal rights to sell the product, and Ford was and is authorized to sell cars. Based on the information from this case, we are not told that any of the people who purchased Pintos waived any of the warranties so this portion of warranty fails to apply in this case.