Ford, Firestore, and Ethics, Case Study Example

As far as contractual theory is concerned, Ford had an obligation to make sure that its product (Explorer SUV) didn’t pose any safety risks to the customers. Even though it is clear that Ford was aware of the risks, especially due to the experiences of the customers in Middle East, even if Ford was not aware, the company would still have violated its obligations towards the customers. We know that customer didn’t bear responsibility for their own security because four conditions concerning contractually theory (Schumann) didn’t materialize in part or fully. First of all, the customers didn’t know that tires were faulty and carrying higher-than-normal risk. The customers also had no way of reasonably estimating the risk’s probability because such events were rare rather than the norm. Customers were also ill-prepared to deal with the risks posed by the faulty tires and similarly, customers didn’t agree to bearing the risk of faulty tires in exchange for some other benefit such as discounted prices.

Ford was also at fault in the light of due care theory. According to the theory, the company was obliged to take special measures to protect consumers from risks (Garrett) such as faulty tires posing even greater risks in areas with warm climate. Most of the accidents occurred in Middle East and U.S. states of Arizona, California, Florida and Texas, all of which have warm climate. Thus, the company had much better understanding of the risks posed by faulty tires in warm-climate areas including those in the U.S. The company could have used its knowledge of accidents in Middle East to warn customers in areas with warmer climate yet the company chose to stay silent until NHTSA’s investigation into the matter.

Ford also violated its obligations under social costs view according to which Ford was fully responsible for any harm done to clients from using its products and in this case, the harm was actually predictable and preventable yet the company’s management chose to stay silent in the hope that the issue will pass without imposing any economic or social costs over the company. Even though tires were manufactured by Firestone, Ford ultimately had responsibility to ensure that all of the components being utilized in the manufacturing of Explorer line of SUV have been tested for reliability and safety. In addition, the company was aware of the potential problems in the Middle East yet it chose to avoid issuing warning to the customers in the U.S. because its experiments concluded that the risks were negligible. The company later decided to recall all product lines using the faulty tires because it had little choice due to negative publicity rather than out of pure concern for the safety of its consumers. In addition, it continued to put the blame on Firestone despite the fact that it allowed the faulty product to make into the final assembly of Explorer SUV and didn’t take action for at least a year despite being aware of the potential problem. Even under the contractual theory which imposes least amount of ethical obligations over the seller of the product, Ford is found to be a guilty party.

As far as Firestone is concerned, it was guilty under the social costs view because social costs view puts absolute responsibility on the manufacturer of any harm that occurs to the user even if it may be the user’s fault. Firestone is also guilty under due care view because it didn’t follow the required quality standards in manufacturing the tires that would have ensured the safe use of the product under different circumstances it may be exposed to. The fact that the company accepted responsibility and recalled its products shows that tires were of subpar quality to begin with and not fully fit for the purpose they were built for. Thus, Firestone clearly showed negligence during the production process. But the company may be less guilty under the contractual theory as Firestone could be forgiven for assuming that its tires were reasonably safe because they were also used by other manufacturers such as GM and Mazda and GM even claimed it had an excellent experience with the tires. In addition, Firestone might not have been aware of the incidents in the Middle East that Ford knew about. We also know that one of the hypothesis put forward by NHTSA was poor compatibility of the 15-inch tires with Ford Explorer design even though Ford rejected the idea. It is also difficult to accuse Firestone of intentionally misleading the public or hiding any relevant information before NHTSA investigation started as could be said for Ford.

One of the major blunders committed by Firestone’s management was cultural insensitivity (Stafford) to victims because they followed Japanese business tradition of refusing to apologize or explain themselves. The management didn’t take into account the fact that they were dealing with American customers and with events that occurred in America where different set of expectations and values prevail.

Both Ford and Firestone were guilty of violating their implicit and explicit contracts with the customers but Ford’s violations exceeded those of Firestone. Ford hid the information it was aware of and refused to take full responsibility for its actions, trying to put some blame on Firestone despite the fact that it allowed the tires to become part of the final product in the first place. Firestone built a faulty product in the first place but it didn’t become aware of the problem in a timely fashion like Ford since no other automobile manufacturer besides Ford experienced problems with Firestone’s tires.

References

Garrett, Jan. How Rawls Could Support the Due Care Principle. 15 March 2005. 29 March 2013 <http://people.wku.edu/jan.garrett/ethics/rawlduec.htm>.

Schumann, Paul L. Product Safety, Consumer Protection, & Deceptive Marketing. 2003. 29 March 2013 <krypton.mnsu.edu/~schumann/www/teach/chapter_6.ppt>.

Stafford, Bowman, Eking, Hanna, & Lopoes-DeFede. Definition of Cultural Sensitivity. 1997. 29 March 2013 <http://www.uvm.edu/~cdci/prlc/unit3_slide/sld005.htm>.