• Dec 15, 2006
Mazda just announced that it has decided to scrap all 4,703 vehicles that were aboard the Cougar Ace cargo vessel when it nearly capsized off the Aleutian Islands in Alaska back in late July. The shipping vessel sat listing to one side for over a month before it was towed to and repaired at a port in Oregon. During that time, the vehicles on board, comprised of the Mazda3 small car and CX-7 crossover, were tied down at severe angles. Mazda had previously told us it would inspect all the vehicles and sell most as used with full disclosure, considering that many showed little or no signs of damage. Regardless, Mazda reconsidered and the announcement that the entire shipment would be scrapped came today from Jim O'Sullivan, Mazda North America's President and CEO.

The decision not to sell any of the vehicles that were aboard the Cougar Ace must have been difficult to make, considering that we estimate the hull of the ship contained over $103 million worth of vehicles (60 percent of the vehicles on board were the more expensive CX-7, so we assumed a conservate per unit average MSRP of $22,000). Not that we're criticizing Mazda for scrapping the entire shipment, but the destruction of 4,703 vehicles, at least some if not most of which are salveagable, seems like a waste. We're sure there are plenty of non-profit organizations and charities that would be grateful to take these vehicles off of Mazda's hands.

You can read Mazda's full press release concerning the matter after the jump.

For those who haven't been following the story of the Cougar Ace, check out the post trail below.


PRESS RELEASE:

All Mazda Vehicles From Car-Carrying Vessel
Cougar Ace to be Scrapped

IRVINE, Calif.--Mazda Motor Corporation today announced that all of the U.S.- and Canada-bound Mazda vehicles from the car-carrying vessel, Cougar Ace, which nearly capsized off the Aleutian Islands in late July, would be scrapped.

"After thorough testing by engineers from our American and Japanese R&D centers, we decided the most appropriate course of action – with our customers foremost in mind – was not to sell any of the 4,703 Mazdas aboard the ship," said Jim O'Sullivan, President and CEO of Mazda North American Operations, based in Irvine, Calif.
The Cougar Ace sat listing at more than 60-degrees for nearly a month after an incident at sea, before it could be towed to the Port of Portland, Ore., for repairs and to have its cargo off-loaded.

O'Sullivan added that although some of the Mazdas aboard the Cougar Ace showed little or no visible damage from being tied-down at severe angles for an extended period, the company reconsidered its initial decision to sell any of the vehicles as used.

"We always put the customer first," O'Sullivan continued. "This drove our decision to scrap every one of the Mazdas involved in this incident. None will be sold as used cars."

Headquartered in Irvine, Calif., Mazda North American Operations oversees the sales, marketing, parts and customer service support of Mazda vehicles in the United States, Canada and Mexico through nearly 900 dealers. Operations in Canada are managed by Mazda Canada, Inc., located in Ontario, Canada, and in Mexico by Mazda Motor de Mexico in Mexico City.


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  • 30 Comments
      • 8 Years Ago
      Noooooooooo I would have liked a mazda3 for cheap (as long as it was in good working condition) plus, like John said, Mazda could have built up major brownie points by donating workable cars to charity instead of just scrapping them all. A sad story comes to a sad end.
      • 8 Years Ago
      Not just legal risk, but warranty repair cost and bad PR risk. Since the CX-7 is realatively new, what if the vehicles on that ship develop issues needing warranty repair at even 2 or 3% greater likelihood? Then their brand new car develops a reputation for being unreliable. I'm sure that there are a lot of factors they considered in making the decision, and in the end, guaranteed insurance payout/tac write-off probably won over unknown consequences. Car companies are very risk averse.
      • 8 Years Ago
      Looks like Mazda's insurance check just came in. They should have done the right thing and announced this the moment the ship was righted, not months after the fact while prospective CX-7 and 3 buyers were either scared away or made to waste time checking the VIN lists.
      • 8 Years Ago
      I'm sure it came down to a dollar amount that the Mazda/Ford executives looked at. Then they evaluated what is the best way to handle it. It probably did cost Mazda money out of pocket, but scrapping them was the best way to go
      • 8 Years Ago
      This is a smart move by Mazda. Even if the vehicles were sold at a discount with full disclosure, they would quickly make their way onto the used market, giving Mazda a very bad rep.
      • 8 Years Ago
      I'm assuming that this means the cars will be totaled. Totaled cars are sold all the time (for parts), salvaged and sold with salvaged titles.

      Many states do not put salvaged on the titles, so they then get sold as used with out disclosure.

      Seems quite possible we may be seeing these cars in the next few years anyway. I doubt they are going to take them straight over to be melted down to be sure this doesn't happen.
      • 8 Years Ago
      Makes sense to me. Even if just one of those cars blew up or was involved in a terrible accident, it would be on the news: "Remember that tanker full of Mazda cars? This was one of them!" Then thousands of people who got one would be terrified and clamoring for their money back. The liability for Mazda is probably not worth it. Why risk being sued (regardless of full disclosure), gaining a reputation for making unreliable cars, and being seen as the company that puts out vehicles that maim people? Giving them away to a charity doesn't change any of that, either. Just recycle them. They'll lose money but at least they know exactly how much.
      • 8 Years Ago
      Financially and insurancewise it was probably better. I think the biggest weight for the decision is what you have mentioned earlier---PR. It will only take one car to taint the entire fleet of used Mazda's and people wouldn't look at them the same for years to come.
      • 8 Years Ago
      Mazda could use the vehichles for employee transportation. Company cars, owned by the company, would not be resold, mazda wouldn't file a suit against itself, and waranty repairs would be done by the same company.
      • 8 Years Ago
      Even if a purchaser signed a waiver to get a deal, and was willing to assume the risk to their lives, there is still major liability risk.

      If someone purchased one of those cars and it failed on the hihgway for some reason, it could injure or kill a driver in another vehicle. Then there is the potential for a multi-million dollar settlement, questions about all Mazda's on the road, and the possibility that this issue will continue making news years from now.

      Anything they would recoup by selling those vehicles at a discount would easily be eaten up by 3rd party law suits and lost sales.

      • 8 Years Ago
      I agree, too much litigation risk.

      While the charity idea sounded good, now that I think about it, Mazda would have gotten a bad rep for that anyway. "Oh, so now you have a bunch of junk cars and trying to get some cheap charity PR, eh? Mazda @%#@#^"

      I think Mazda made the only acceptable move in this instance.
      • 8 Years Ago
      Good move by Mazda. It is a known fact that the sum of a car's parts add up to more than the selling price of the car. The magic is because automakers buy in bulk and pass on the savings.

      I'm sure they'll be keeping the good resalable parts and making some money off it as well.

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