In Denny v. Ford Motor Company in the Warranty chapter, did Ford act ethically in defending that the ...

No, Ford did not act ethically in defending the Bronco II due to various reasons.
The plaintiff proved how Bronco II while designed for off-road travel was marketed and sold as a vehicle suitable for everyday suburban driving.
Since everyday suburban driving was the one of the reasons for which Bronco II was sold it could be not consider safe and fit for use.
Secondly, the information provided in the manual was misleading especially for customers who are not familiar with different car specifications and safety features.
Ford sold the vehicle by claiming it was having four-wheel drive but lied that the safety features of the vehicle matched those of a passenger vehicle.
The plaintiff purchased the Ford Bronco II because of the safety benefits of its four-wheel drive while she had no use for off-road purposes. She bought the vehicle assuming she could use it for everyday road travel and suburban driving as marketed by Ford in their advertisements.
The court applied consumer expectations test under implied warranty and utility test (or risk test) under strict product liability during its final verdict. If a manufacturer sells a defective product and it cannot be used for its intended purpose then the warranty is breached.
Ford Motor Company defended the case by proving that advertisement was merely a sales strategy which should not attract liability concerning fitness for purpose. This was clearly an unethical stand to take.