Question

Ford decided not to recall the Pinto when it found the fuel tank design flaw but to simply pay the lawsuits when people died instead. What aspect of paying the lawsuit made paying them preferable?

A). The recall didn’t fix the problem.
B). The law dictated that Ford pay them.
C). Paying the lawsuit was the more ethical choice.
D). The lawsuits were more cost effective.

Answer 1

D). The lawsuits were more cost effective.

Ford used a cost–benefit analysis (the infamous "Pinto memo") comparing the cost to modify/recall cars with the expected payout for burn injuries and wrongful-death claims. The analysis showed paying lawsuits would be cheaper than fixing all the cars, so they chose that option.