Sometimes the greatest danger on our roads isn’t other drivers – it’s our own cars.
Auto manufacturers, intent on saving money, have cut back on safety procedures and oversight, putting profits ahead of people. This has led to multiple high profile recalls, thousands of preventable deaths, and countless injuries.
The auto industry’s disregard for consumer safety was first uncovered by Ralph Nader in his book, Unsafe at Any Speed, which chronicled the dangers of the Chevrolet Corvair. Nader detailed GM’s choice during the manufacture of the Corvair: implement safety standards or save a few dollars per car. GM chose the latter, and hundreds of drivers and passengers paid for it. Nader’s expose was influential in the passage of the National Traffic and Motor Vehicle Safety Act, which created the National Highway Traffic Safety Administration to set and administer new safety standards for motor vehicles.
Despite the debut of the NHTSA, the auto industry continued to knowingly defy safety standards to save money. We’re all familiar with the saga of the Ford Pinto. In 1981 – 15 years after GM’s debacle with the Corvair – a jury found that even though Ford had known the Pinto’s gas tank was unsafe, it refused to change it because a new design would be more expensive.
Following the Corvair and Pinto scandals, you would think the auto industry would learn its lesson; but problems persist today. During the 1990s and early 2000s, with SUVs gaining popularity, car rollovers became an epidemic that were eventually traced to a design defect. The uptick in car rollovers also turned the spotlight on roof crush injuries. Despite setting a federal standard for roof strength in the 1970s, car companies continue to outfit their vehicles with weak roofs that can easily crush a foot or more during a rollover. Seat belts, airbags, and tires have also come under scrutiny as deaths and injuries continue unabated. As technology advances, we face new problems like unintended acceleration. Toyota was forced to recall millions of vehicles after reports of unintended acceleration, which could have been caused by an electrical error.
Why does the auto industry continue to flood the market with dangerous and defective automobiles? Because we’ve let them off the hook. Thanks to tort reform, manufacturers aren’t being held fully liable for their negligence. Whereas they once considered the costs of implementing safety standards, they now look at the costs of compensation. If they have a reasonable expectation that they won’t be forced to pay full compensation for the injuries they cause, why go the extra mile?
The best – and most callous – example of manufacturers’ cost benefit analysis is the legendary Ivey memo. Written in 1973 by Edward Ivey, a mechanical engineer for General Motors, the memo addressed whether GM should replace its fuel tanks, which were susceptible to punctures in collisions, increasing the likelihood of deadly fires. Ivey’s mission was to figure out which cost the company more: dead consumers or implementing a new design. Ivey estimated that it would cost about $8.59 per vehicle or $352,190,000 total to fix the fuel tanks. But how could Ivey estimate the cost of not fixing the fuel tanks? Well, in cold, calculated figures, Ivey decided that the value of a human life was $200,000. Armed with that completely arbitrary number, and statistics that showed about 500 GM cars were involved in fuel tank related accidents each year, he decided that not fixing the fuel tanks would only cost about $2.40 per vehicle or $98,400,000 total per year. Ivey’s conclusion was that it would save GM about $6 per vehicle or $253 million to let people burn.
And what did GM do with this information? They ran with it. GM buried the memo, declined to fix the fuel tanks, and went along their merry way. The truth wasn’t discovered until 1998, when a Florida judge ordered the memo into evidence in a case where two children burned to death following a fuel tank puncture.
Although the Ivey memo was written in 1973, it governed GM’s practices for the next 30 years. And thanks to tort reforms like damage caps, manufacturers will continue to put a price on consumers’ lives and balance their books with safety cuts.