Final answer:
Shipping tires with a known 1 percent defect rate falls into a gray area of being possibly unethical but legal if the defect rate is within acceptable limits and the company is transparent with customers. It becomes primarily a question of business ethics and commitment to customer safety and satisfaction. The related context of tariffs on imported tires illustrates the complexity of economic policy decisions on both consumer prices and domestic industries.
Step-by-step explanation:
The question asks whether it is ethical and legal or unethical and/or illegal to ship tires knowing that 1 percent of all tires have production defects, while offering mileage allowances for tires that wear out prematurely. The act of knowingly shipping defective tires can be seen as unethical because the company is intentionally distributing a product that does not meet quality standards and could potentially put consumers at risk. However, if the company adheres to industry standards for defect rates and is transparent about their warranty and compensation for premature wear, the practice could be deemed legal.
From a business ethics standpoint, this practice might also be viewed with less scrutiny if the defect rate is within an acceptable industry range and proper recalls and compensations are in place. Ethical business practices call for transparency and doing what is reasonable to ensure consumer safety and satisfaction. Thus, while the practice of shipping tires with a known defect rate of 1 percent might be legal if all regulations are followed, it still raises questions about the company's commitment to quality and customer care.
Regarding the tariffs on imported tires from China, this political issue illustrates how economic policies can affect product prices and availability, with consequences for both consumers and domestic industries. The tariff imposed by the Obama administration was an effort to protect domestic jobs against cheap imports, which resonated with the United Steelworkers union but posed challenges for companies importing tires.