XYZ Hose Company And The Case Of The Bursting Hose

Risk Assessment And Engineering/Corporate Responsibility To The Public

Synopsis

In 1977, a nationally-respected, family-owned firm, the XYZ Hose Company, decided to switch from their rayon-reinforced hoses to AAH #1. XYZ company representatives ran tests, and decided that AAH #1 would prove more robust in the field than the less expensive nylon and polyester products. Switching to AAH #1 made sound business sense, because although more expensive than products previously used, AAH #1 allowed them to undercut their competitors who used stainless steel.

Until the 1977 introduction of XYZ's inexpensive AAH #1 hose, farmers' cooperatives characteristically used hoses reinforced with stainless steel. Thus, purchasing a cheaper hose, made of less expensive material, would obviously mean considerable cost savings for all involved, from the manufacturers, to the farmers' cooperatives, to the farmers.

Unfortunately, even though XYZ's AAH #1 hose was tested at both XYZ and an independent testing laboratory, and even through it met all the current industry standards, something went wrong with the XYZ AAH #1-reinforced anhydrous ammonia hose in use, resulting in devastating consequences for several of the product's end users. In one reported case, the AAH #1 hose burst while a Kansas farmer, Bob Smith, was setting up the equipment for knifing the anhydrous ammonia product into his fields. When the XYZ AAH #1 hose burst, releasing the toxic ammonia into the air, the force of the discharge blew Smith's protective goggles off his face. Smith is now legally blind, and has sustained lifetime disfigurement as a consequence of severe burns received. His physical disabilities have made him dependent on others, and he is now incapable of making a living as a farmer the only occupation he has ever known.

As a result of this and other calamitous incidents involving AAH #1 hose ruptures, XYZ and the various farmers' cooperatives selling the product were sued by farmers. Bob Smith, and other farmers like him, claimed that XYZ did not properly design, test and monitor their product in use, and as such put the end user at inordinate risk. XYZ, on the other hand, argued that their product was misused or abused in the field; yet, because they are a responsible corporation, XYZ decided to pay out-of-court settlements to the various claimants for injuries they suffered while using the AAH #1 hose, no matter who was ultimately at fault. The jury is still out on who is liable for the hose ruptures.

The case of the XYZ AAH #1 bursting hose raises important issues for engineers. What are the engineering and corporate responsibilities to the public? In addition, because XYZ's AAH #1 hose was innovative, and the specifications (written by the Rubber Manufacturers Association and The Fertilizer Institute) did not give guidelines for testing the experimental yarn as a reinforcing material, there is a question about the XYZ design engineers' responsibilities. When professional codes and regulations lag behind technological innovation, can engineers use existing specifications as bench marks in risk assessment?

Questions:

What are the ethical dilemmas engineers face when innovative design goes beyond current industry standards and specifications?

What are the engineering/corporate responsibilities to the public when innovation fails?

Did XYZ do the right things, at the right times? Did those involved in the case ask the right questions during the innovation process, and did they ask the right people at the right time? Why or why not? What entities should have been responsible for the various aspects of market penetration and product safety: XYZ design engineers, managers, and production and marketing personnel? Engineers at the independent test labs? Professional Engineering Societies? Those involved in writing the Rubber Manufacturers Association codes? Farmers' Cooperatives? Farmers?

Should XYZ have labeled their hoses with more explicit warnings? Would it have made any difference?

After withdrawing the product from the market, did XYZ's advertisement in the Farmers' Cooperative Magazine suffice? Could the company have done more? If so, what? When does their responsibility end and the farmers' cooperative's and farmers' begin?

Did XYZ act responsibly (or ethically) when arguing against the plaintiffs or other defendants (i.e., the farmers' cooperatives) involved in legal proceedings against them? Should XYZ have been sued at all?

Who is culpable for the damages the XYZ product inflicted on the end users (i.e., the farmers)? The chemical company that introduced AAH #1? XYZ and/or its engineers? The independent testing laboratories? The owners of the cooperatives supplying farmers with anhydrous ammonia hoses? The farmers? Why?