[masklinn]

Ford literally did a cost/benefit analysis for fixing the Pinto versus societal costs of injuries and deaths, and went with the cheaper option. They actually put it to paper and sent that to the NHTSA to argue against fuel system regulations.

“Dysfunctional management” is a direct function of managerial incentives, which is generally capitalistic greed (aka “obligation to maximize shareholder value”)

[gnfargbl]

They thought they went with the cheaper option, but in fact they only considered the value of a life as estimated by the NHTSA ($0.2M). In reality, the damages that juries tended to assign for each needless loss of life turned out to be more like $100M.

If Ford had accounted for those punitive costs in their calculation, then the outcome of the cost/benefit calculation would have overwhelmingly favoured a fix. The real business problem was not the empathy-free approach, but poor mathematical modelling.

[meigwilym]

I think that deciding to go with the cheapest is an empathy-free approach, regardless if the maths were off.

[masklinn]

> They thought they went with the cheaper option, but in fact they only considered the value of a life as estimated by the NHTSA ($0.2M). In reality, the damages that juries tended to assign for each needless loss of life turned out to be more like $100M.

That was in large part due to the disgust over the report they had penned.

> If Ford had accounted for those punitive costs in their calculation, then the outcome of the cost/benefit calculation

Would still have been a cost/benefit calculation rather than a moral or ethical one, aka capitalistic greed.

[nradov]

Every auto manufacturer does the same thing. The Ford Pinto case was particularly poorly handled. But for any given car design, it's always possible to further improve safety by making it more expensive. A Mercedes-Benz S-Class is far safer than a Nissan Sentra by any objective standard. Should we tighten safety requirements so that every car is as safe as the S-Class, and costs about as much? Where do we draw the line on safety regulations?

[yawpitch]

If we tightened safety regulations so that every car was as safe as the S-Class then cars as safe as the S-Class would dramatically drop in price, simply by virtue of there being more of them.

As for where you draw the line on safety regulations, the optimum answer is always “considerably past the point that business owners start complaining about excessive regulation”.

[kube-system]

The S-class is a bad example, because it is expensive for other confounding reasons.

However, all else equal, a vehicle with more active and passive safety features and more safety engineering is more expensive. Even after you account for economies of scale.

For example, airbags are extremely mass produced and have just about as much economies of scale as possible. But, in countries where they are not mandated, you can still find cars offered without them, because they are cheaper. The same is also true for vehicles without UHHS safety cages, ABS, stability control, etc. All of these things cost money.

[yawpitch]

Take all the safety items that do actually contribute to the S-Class sticker price, now mandate them in all cars. The price of all cars goes up, sure, but also the cost of a car that’s as safe as the S-Class is goes down. What you’ve done is decreased the cost of having the more safe option while eliminating the less safe option, precisely because most of those currently premium / luxury items simply haven’t benefitted at all from economies of scale. The airbag example proves the point, inside any country that mandates them. Are there cheaper and more dangerous cars available without them? Sure… but not inside the borders of any country that cares about the survival of its citizens.

We should all live in countries that mandate extremely high safety standards and spend their time worrying about how to raise the average income to compensate, rather than in a country that accepts unreasonable risk just to keep wages unreasonably low.

[FredPret]

You don’t think the input costs have something to do with the price of an S Class?

Pricing is due to both supply and demand - there can’t be a sustainable supply of a expensive-to-make cars at loss-making prices