Cost of a Mishap
CRMDEEN_at_aol.com
Thu, 8 May 1997 20:47:46 -0400 (EDT)
Tony Sasso has an interesting angle, and one that I myself used once to
motivate commitment to a program. What is the cost of a crash?
Of course, we usually say you can't put a value on human life. I would
submit that we do, in a very simplistic way. The civilian method is
different than a military one, but try this:
Consider the life insurance a person takes out on themself, plus the
earning potential that individual would have contributed to the family. If
one uses the actruarial tables of leading insurance companies for a wage
earner who has a spouse and 2.4 children, you can come up with some
interesting numbers. Add to this the potential settlement of possible
lawsuits that the airlines must prepare for. Example? Here's my WILD GUESS:
Life insurance=$150,000 (thats a low average)
Earning potential= $450,000 ($30,000 annual earnings x 15 years)
Since the earning potential would be the basis for a lawsuit (ask a
lawyer), the value of an average person could easily be $600,000. Now add the
full passenger load to the cost of a jumbo, like a DC-10:
250 passengers=$150,000,000
Replace the DC-10= 75,000,000
"So, Mister Beancounter: If one of our DC-10s crashes with a full load of
passengers, we will have spent 225 million, and we'll not have any assurance
of not doing it again. So why are you so reluctant to spend 1 million
dollars on a quality human factors department, with up-to-date training, and
research?"
Unfortunately, the beancounter can counter:" if I give you a million
dollars for a CRM program, can you promise me we won't crash an airplane?"
A very wise old man once said, "Human error is inevitable."
And he's right.
Greg Deen
HTI