Fighting the lawsuits can help the bottom line (it did for Exxon).
But it isn't the only thing that helps the bottom line. Whether or not you fight and delay the lawsuit, limiting the damage in the first place helps the bottom line (Exxon still had to pay something like a half billion, just not the $10bil or so it would have had to pay had it just caved at the beginning.)
In other words the profit motive (which includes the incentive to reduce a loss), is a powerful force behind the cleanup efforts.
Settle on day one or delay for 20 years, either way its in the companies interest to limit the damage it might have to pay for.
Same with Ford years ago making the coolly calculated decision that paying off millions (one-by-one) in death benefits over Pinto 'flamemobile' court actions was more COST EFFECTIVE then re-engineering the gas tanks would have been.
Which sounds horrible, but really it isn't, at least not in general terms for all such decisions (I'm not arguing the Pinto case specifically, other than to note its "flame-mobile" reputation was exaggerated).
Every car (or most other things) has some danger involved in it. You can spend money to reduce that danger but doing so often isn't cost effective, even when considered from the perspective of society as a whole. I submit a company looking out for its bottom line, but facing liability should it cause others harm is often in a better position to produce a decent tradeoff than the political process.
Many safety regulations billions of dollars per estimated life saved (not that they actually cost trillions of dollars, at least no in the short run, but that they don't save lives in the short run, if it costs a million dollars per year, and is estimated to have a one in a thousand chance to save a life each year, than it costs a billion per estimated life saved).
That's not an argument against having safety regs. In fact there are probably some areas where it might be useful to add well targeted and written regulations, but there are many safety regulations which are net negatives.
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What Does it Cost Society to Save One Life?
by John Boehnert
Published in Providence Business News (April 3, 1995)
How much cost should our Government impose on society to save a life? $100,000? $1 Million? $10 Million?
How about $72 billion per expected statistical life saved? That's the estimated cost of OSHA's formaldehyde standard.
That may be an extreme example of environmental overregulation, but even less costly regulations demonstrate the inefficiency and irrationality of many federal regulations governing health, safety and the environment.
For example, the 1986 OSHA asbestos standard costs Americans $89 million per statistical life saved, and the 1989 EPA asbestos standard cost $104 million per life saved.
One economist has calculated that the cost effectiveness
of federal regulations per life saved ranges from $100,000 to $119 billion, with a median value of approximately $9 million. However, environmental regulations are more costly than safety regulations.
This is particularly bad news, since environmental regulations are the fastest growing segment of federal regulations by costs imposed...
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