
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.
- Cargo ship Cougar Ace tips over: 4,700 Mazdas aboard
- Cougar Ace moored in Wide Bay as salvage continues
- Cougar Ace salvage operation turns deadly
- Look who's up: Cougar ace stabilized and almost fully righted
- Cougar Ace: Could some of her Mazdas be saleable?
- Cougar Ace Update: No Mazdas aboard will be sold as new
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.













Reader Comments (Page 1 of 2)
Kowell @ Dec 15th 2006 1:54PM
The cost of evaluating every single unit was probably too expensive, not to mention time and energy consumming...
A Gupta @ Dec 15th 2006 1:57PM
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.
Nick S @ Dec 15th 2006 2:04PM
Two words, Insurance Settlement. Mazda might not have received insurance payments for the cars if they sold them used... They're probably going to break even or make money by scrapping them rather than trying to sell them used, maybe at a loss.
JJM3 @ Dec 15th 2006 2:09PM
There's a significant potential litigation risk to releasing any of these into the market - even for free.
vectorbug @ Dec 15th 2006 2:26PM
does "scrap" necessarily mean "throw in a pile marked 100% non-recyclable"?
Theres got to be a use for the parts once they're deconstructed and or melted down, right?
Joshua @ Dec 15th 2006 2:29PM
It's a no win situation, if they sell them they're open to litigation if it turns out there's something wrong with them (a bearing got tweaked, a seal cracked, etc), plus they couldn't get much money for them anyway. If they destroy them they're labeled as wasteful. If they gave them away, they would be destroying the resell value of Mazdas for the next few years and they still would have the possible litigation issues.
Unfortunatley this is probably the best resolution to the problem.
Coachzed @ Dec 15th 2006 2:29PM
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.
hUcKiE @ Dec 15th 2006 2:30PM
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.
Tool @ Dec 15th 2006 2:38PM
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
C'est Raoul @ Dec 15th 2006 2:42PM
That's a good move. It would have been bad for their PR. A bit like New-Orleans/Louisianna cars.
The other thing as one said is insurance settlement.
I think one option would be to sell those cars in an easier market, at a bargain price, like a developping country, with different rules, and especially in a smaller and less vital market, reputation-wise.
All this being negociated with the insurances. As it's their loss too.
djSyndrome @ Dec 15th 2006 2:44PM
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.
Bill @ Dec 15th 2006 2:45PM
I sure wouldn't mind having an extra set of winter wheels for my 3. It does seem a huge waste, but I see their reasons from a reliability and customer relations standpoint. Dismantling them for parts would be too costly, so they'll probably all just go in a crusher.
Chet @ Dec 15th 2006 3:07PM
Mazda is making the right move. If only a handful of these cars were to have problems, nevermind them being sold with full disclosure, the perception of Mazda quality and value would suffer.
Anyone who's spent time around bargain-bin shoppers knows they can have unrealistic expectations and big mouths.
Daniel @ Dec 15th 2006 3:10PM
I think they are doing the right thing. If one of those "discounted" or "free" cx7s failed and killed someone it would ruin any "salvage" of the lot. Most likely, they'll strip the cars and re-use interior components in future lots. Engines, frames, body parts, etc should all be melted down and re-formed.
Better for the brand, image, & reputation than to put out potentially dangerous/poor-quality vehicles.
Bobby @ Dec 15th 2006 3:59PM
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.
apt34 @ Dec 15th 2006 4:32PM
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.
What?! @ Dec 15th 2006 4:40PM
"Anyone who's spent time around bargain-bin shoppers knows they can have unrealistic expectations and big mouths."
Well said Chet. Those shoppers are dumbasses anyway, since they're the ones hard to please, and take the seller to court because of something that was right, they perceived wrong.
Evan Brom @ Dec 15th 2006 4:47PM
This will work out better of the books and create a differed tax asset where donating them would would not be as financially sound.
C\\\'est Raoul @ Dec 15th 2006 5:42PM
I am not a specialist of insurance, but even if the check is in, I am pretty Mazda has a big loss on it. (I guess it's likely the full amount is not covered, also think of the cost of delays etc.)
Can't you think a fleet could buy them at a good bargain price? For example: an army or some other kind of fleet. Could be a win win situation for both side. Or could Mazda simply re-use them for their own internal use?
I can't believe they will go to the crusher. I guess the insurance contract is clear and does not leave many choices. Those cars belongs to who now? The insurance company?
BrianS @ Dec 15th 2006 6:48PM
I'd sign a waiver and buy one of each! Hell, if they're going to be scrapped, I'd take two 3's and turn them into track cars.