Apples and Oranges – Ford and Toyota?

The escalating Toyota troubles – stemming from the very public and graphic 911 call of the cop in the Lexus who crashed and died with family at 100+ miles an hour (and similar stories several years before to today, according to Woz and many other NHTSA complaints), is now turning into a PR disaster worthy of the Exxon-Valdez incident.

The foot-dragging, and eventual recall by Toyota, thanks to intense media scrutiny and LaHood’s US DOT pushing, brought me to another classic case study – the Ford Pinto.

According to data and much research, Ford ran a cost-benefit analysis, essentially determining paying for accidents and lawsuits is cheaper than fixing the issue (in case you don’t remember, the issue was exploding fuel tanks). I’m not saying Toyota took the same gamble (and lost), but the similarities will likely come into view. Important to note that Ford really does have it together these days, I couldn’t imagine them doing something similar again – especially after the Explorer/Firestone tyre incident a number of years ago.

This summary hits the spot:

Cost-Benefit Analysis

One of the tools that Ford used to argue for the delay was a “cost-benefit analysis” of altering the fuel tanks. According to Ford’s estimates, the unsafe tanks would cause 180 burn deaths, 180 serious burn injuries, and 2,100 burned vehicles each year. It calculated that it would have to pay $200,000 per death, $67,000 per injury, and $700 per vehicle, for a total of $49.5 million. However, the cost of saving lives and injuries ran even higher: alterations would cost $11 per car or truck, which added up to $137 million per year. Essentially, Ford argued before the government that  it would be cheaper just to let their customers burn!

Still up in the air is whether a software glitch is in play, espeically regarding unintended acceleration in the Prius as Apple co-founder Steve Wozniak has been highlighting the problem with the electronics.

Update Feb. 3 @ Noon from Autoblog:

Report: NHTSA turns an eye towards electronics as source of Toyota troubles

Reports from multiple news outlets cite sources within the National Highway Traffic Safety Administration who claim the government is now looking into electrical problems as the source for Toyota’s recall troubles. The unnamed agency employee reportedly told CNN that the government is investigating whether electromagnetic interference might cause the electronic throttle control system to malfunction. The source went on to add that the agency has found no evidence of problems with the electronic throttle, though engineers at NHTSA were still actively investigating the matter.

One response to “Apples and Oranges – Ford and Toyota?

  1. It’s all about the bean counters.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s