Mazda To Destroy $100 Million Worth Of Brand New Cars

Two years ago the freighter Cougar Ace nearly sank, spending weeks bobbing at an impossible-looking angle in the North Atlantic. The cargo was eventually saved (you can read about the salvage effort here), but what does one do with cars that have spent weeks at sea? Can you be sure that they weren’t damaged?

The Wall Street Journal says that Mazda had lots of potential buyers. Movie studios wanted to use them as stunt cars. High schools wanted them for auto shop classes. In the end, Mazda decided to destroy them. All of them.

From the Wall Street Journal:

Mazda turned everyone away. It worried about getting sued someday if, say, an air-bag failed to fire properly due to overexposure to salty sea air.

It also worried that scammers might find a way to spirit the cars abroad to sell as new. That happened to thousands of so-called “Katrina cars” salvaged from New Orleans’ flooding three years ago. Those cars — their electronics gone haywire and sand in the engines — were given a paint job and unloaded in Latin America on unsuspecting buyers, damaging auto makers’ reputations.

Mazda saw no easy way to guard against these outcomes. So it decided to destroy approximately $100 million worth of factory-new automobiles. “We couldn’t run the risk of damaging the brand name that Mazda worked so hard over the years to develop,” says Jeremy Barnes, the company’s corporate-affairs director for North America.

It turns out that wrecking cars isn’t a simple matter. “We had to create a disassembly line, basically,” says Bob Turbett, the Mazda executive overseeing the destruction process.

Crazy!

A Crushing Issue: How To Destroy Brand New Cars [WSJ] (Thanks, Erie!)

Comments

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  1. astraelraen says:

    The real truth to this article is that they already got full compensation from their insurance company.

    If they went and resold all the cars, its called insurance fraud.

    I don’t even think that they could have given them away. Technically since insurance paid them out, the cars are the insurance company’s property.

  2. Zoom Zoom… disassembly plant

  3. MonkeyMonk says:

    Score one for the trial lawyers. One of the unfortunate side effects of living in such a litigious world.

    This is also one of the main reasons why most restaurants throw out their leftover food rather than donate it to a food panty or shelter.

  4. kbarrett says:

    If Mazda is disassembling them, then either they compensated the insurance company, or they decided to self-insure.

    I don’t see them getting away with GTA on that scale.

  5. consumersaur says:

    Best Wired story ever.

  6. bdsakx says:

    I think they made the right choice here, given the risks of having the safety features comprimised. At least they won’t be throwing most of them into a crusher or landfill – it’s heartbreaking watching what could be a perfectly okay (and beautiful) car get crushed.

  7. woot says:

    The Wired story is, indeed, an incredibly good read.

    As for Mazda, it was a choice between taking the insurance loss OR reselling the cars (or parts of them) for revenue they’d have to share with the insurance company.

    Since Mazda could not absolutely control whether or not these cars / parts were eventually passed off as new, they made the right choice in destroying all of the cars.

    At the very least, all of those cars had been held at a 60 degree angle for a prolonged period. Who knows where fluids that would normally drip down had – instead – dripped up to. Not to mention that a lot of the cars had been at least partially submerged in salt water.

    They made the right call.

  8. louveciennes says:

    They could have donated them to under-privileged schools for auto shop classes. Problem solved.

    I don’t think chucking them in a landfill was a very good solution.

  9. irfan says:

    North Atlantic = North Pacific?

  10. Orv says:

    @louveciennes: Again, though, they couldn’t be sure that someone wouldn’t re-sell them as new. I suspect this is as much about protecting their brand image as it is about litigation.

  11. attackgypsy says:

    Most likely, they’ll recycle as much of the raw materials as possible.

  12. truthbuddy says:

    @louveciennes: Did you read the post? or was your bleeding heart getting in the way. They had no other choice.

  13. camman68 says:

    @louveciennes: I don’t think they were ever planning on “chucking them in a landfill”. According to the article, the scrap will be recycled.

  14. Buckus says:

    This is the right choice for the automaker – and any automaker faced with such a dilemma. Kudos to Mazda for making the hard decisions.

  15. TechnoDestructo says:

    So many parts that would have been just fine…why? Why couldn’t the insurance company take a share? I mean…wheels? come on…wheels? Why would you need to…god damn.

    Yeah, I can see all the electrics and upholstery and stuff…but how about glass? Turn signal lenses and headlight housings. There’s plenty of stuff that just would not be hurt. I mean it could have sat at the bottom of the ocean for a decade and would probably still be good as new.

    This wasn’t an all-or-nothing problem

  16. FLConsumer says:

    I haven’t had a chance to read the article (looks very interesting, printed it for reading later on tonight), but I’m not entirely sure what Mazda’s issue would be with these cars. There’s tons of places in the world where cars are exposed to salt air 24/7. Any coastal beach community has this going on. Yes, the cars do tend to rust out very early in an environment like this, but then again they’re exposed to it for years at a time.

    This isn’t too dissimilar to what happened to 130 Liberty St. in NYC, the former Deutche Bank building. There wasn’t anything about that building which wasn’t fixable. Deutche Bank just didn’t want to be there and came up with a flurry of non-issues and hired paid “experts” to show such issues as valid threats to get the insurance money and unload a large skyscraper that they no longer needed.

    In Mazda’s case, this isn’t exactly prime time to be selling cars. When people aren’t able to afford their mortgage or credit card bills, buying a new car is waaaay down on the priority list. I don’t necessarily blame them. I’d much rather have $100M of cash rather than $100M of product to sell in this economy.

  17. XTC46 says:

    @TechnoDestructo: right, but then you need to pay to get the parts, test the parts, repackage the parts, then sell as not new parts. Its a lot of money to try and recoupe what may amount to a loss. May as well just cut the losses and take the insurance check.

  18. FLConsumer says:

    For those looking for more info on the story:

    WSJ article on the demolition process:

    [online.wsj.com]

    Funny, the cars are DRIVEN to the demolition bays

    Pics of the cars waiting to be destroyed + car shredder:

    [virtualearth.spaces.live.com]!2BBC66E99FDCDB98!11920.entry#comment

  19. @MonkeyMonk:

    Really? This is a win for trial lawyers? Was it the utter absence of the word lawyer that forced you to take a shot at them in such a generic way?

    I am so fucking sick of people complaining about “trial lawyers”.

    How dare people file a lawsuit against companies for things that may harm, will harm, have harmed people!?!

    Do you have any idea how idiotic it is to blame trial lawyers for lawsuits?
    That’s like blaming police officers for tickets.

    Obviously there has to be a point when personal responsibility should trump legal liability; but this is a prime example of WHY having trial lawyers out there, forces companies to do the right thing.

    Score one for the trial lawyers, indeed, sir.

  20. beernut says:

    AHHHHH….. thanks Cougar Ace for raising the resale value of my Mazda3. Supply and demand.

  21. No cross-post with Jalopnik?

  22. @MonkeyMonk: I’m sure it was a typo, but you now have gotten my brain abuzz about the matter of “food panties.”

  23. enascar88 says:

    Do you really think they will destroy them? Show some proof then again someone can just take any old car and destroy it.

  24. Jean-Baptiste Emanuel Zorg says:

    Well, i can certainly understand Mazda’s fear that these cars, if given/sold/donated, might make it into the wild and expose them to liability and/or bad brand PR.

    But really. How friggin hard would it have been to flag all of the titles as salvage, then obliterate and overwrite all of the VINs with “NOT FOR ROAD USE” and donate them to shop classes and safety testing organizations around the country?

  25. MontanaJen says:

    @MonkeyMonk: You mean to say that you wouldn’t sue Mazda of they sold a car after they knew it had been sitting on top of an extremely corrosive liquid for two weeks, and your airbag didn’t deploy? Really? Like it or not, some of those lawsuits actually protect consumers and force mega-corps to act responsibly.

    Yeah – I think this was a no-brainer for Mazda…perhaps an argument could be made for donation to schools for tech teaching – but no way does this have anything to do with trial lawyers.

    Talk about a cop-out response.

  26. EyeHeartPie says:

    @FLConsumer:
    How many of those coastal places are also at 90 degrees from the force of gravity? The cars sat for weeks at an angle that no car is designed to sit at. The high, undesigned-for pressures combined with the salty environment could have cause premature aging of components that usually wear out over years, causing accidents that have almost no chance of being predicted. Who takes their brand new car to a mechanic to have it checked?

    Also, to all the people saying this was a waste, don’t forget that Mazda said they would disassemble the cars, not crush/trash/junk/toss them. That means the metal, as well as all reusable parts will probably be melted down and reused for the next generation of cars.

  27. Groovnick says:

    Here’s a great story on the team that managed to save the ship. One man died during the salvage.

    [www.wired.com]

  28. Groovnick says:

    whoops, didn’t notice that the jump had the link already.

  29. Orv says:

    @TinyBug: Titles can be “laundered.” VIN plates can be swapped. It happens all the time. If Mazda didn’t destroy these cars it’s almost certain some of them would make it back onto the market as “new.”

  30. Lambasted says:

    It’s a shame for Mazda but they made the right call. Hat’s off to them.

    It’s impossible to keep track of cars once they are sold. The first party buyer may sign a hold harmless waiver releasing Mazda from any liability but there is no way for Mazda to control any possible subsequent resales to unsuspecting buyers.

    I haven’t read the article but hopefully Mazda will be able to reuse the parts so it won’t be a total loss.

  31. homerjay says:

    Oprah could have made a two-part show out of this!

    EVERYBODY SHREDS A CAR!!! EVERYBODY SHREDS A CAR!!! EVERYBODY SHREDS A CAAAAAAAR!!!!

  32. CaliforniaCajun says:

    I think you meant North Pacific…because the Ace was towed to Dutch Harbor Alaska for righting…and that’s a long-ass tow!

  33. Personally, I think that they missed a great marketing opportunity: “Look at all this shit that happened to our cars and they still run great*” with the asterisk leading to a shitload of disclaimers. Maybe tweak the wording a bit, nut you get the idea.

  34. @TinyBug: @louveciennes: I would love to see the parent of a shop class child hurt/maimed/killed by a airbag that deployed while they were trying to remove it due to corroded wiring thank Mazda for donating the car. Oh wait, they would probably sue them, the school, the district, etc….

    Donating a car which you know spent time in an environment which could have damaged it and lead to a hazard is illegal. Why don’t we donate drugs that are past their expiration to teaching hospitals? It’s really a shame to see drugs which are PROBABLY safe go into an incinerator, when they could help teach people about the human body.

  35. Kos says:

    All those smashed cars could have made a great art project. Too bad.

  36. Silversmok3 says:

    Does anyone remember the saying “No good deed goes unpunished”?

    Lets say Mazda did donate them. Scam artists by the boatload ( pun intended) would buy the ‘donated’ cars and pass/sell them off as new.

    Then consumers would have the fun task of guessing whether their new Mazda 3 is salt-water free or not.And with bad cars mixed with good, Mazda would get sued for a problem with a perfectly good car, because people are greedy and litigous .

    To boot: Saltwater damage is progressive. A saltwater damaged car will work fine until the water+salt corrosion turns the engine computer and wiring to mush.One day your car is fine , next day oops! No brakes.

    Those cars are exactly where they belong: In the scrapyard.

  37. Buran says:

    @Voyou_Charmant: The “right thing” doesn’t involve destroying even things that couldn’t be damaged by this and not donating them to people in need. Seriously. Wheels, tires, stuff like that wouldn’t be affected by this much if they were made properly, and lots of people can’t afford even basics like that.

    And those people aren’t getting the help they need (transportation to get to their job/get food etc) because Mazda decided to destroy it all.

    Good job, Mazda. Good job at proving you don’t care.

  38. BrianU says:

    Mazda made the correct decision. I wonder if the engineers then considered “shock testing” their new models in development with “worst sea conditions.” Or, at least analyze a sample of parts salvaged to see what effects, if any, these parts suffered. It could be the best advertisement for car buyers that live near the shore and actually have to worry about ocean weather and salty spray contacting their vehicles for years.

  39. D-Bo says:

    @consumersaur
    Agreed

    @Groovnick:
    I was about to post this as well. It is an excellent read.

  40. StevenJohn says:

    No insurance fraud. The only way this is happening is with insurance appproval (and most likely recommendation).

    The recycling process is going to be more effecient than normal, ’cause of the volume being done at one time.

    A win-win for everybody.

  41. EyeHeartPie says:

    @Buran:
    They reused the reusable parts, which includes “wheels, tires, stuff like that wouldn’t be affected by this”. Do you honestly believed that Mazda (a for-profit corporation) would completely trash and destroy anything and everything, even the salvageable parts?

    They destroyed the cars, yes, but they did it by disassembling them. They didn’t just burn them all, or put them in a compactor. They disassembled them. You make it seem like they laughed at poor people while blowing up the ship and sinking it to the bottom of the sea.

    Read the article before you feel the need to comment on it.

    Also, you state that Mazda should have donated the stripped pieces of the cars. What if one of those pieces had failed, and the person driving a car with a Mazda tire died as a result of a blowout? You think people would just shrug it off as nothing? Mazda did the only thing they could in this situation to protect themselves from lawsuits.

  42. comedian says:

     
    @EyeHeartPie:

    You are 100% wrong in your assertion. Mazda not only destroyed the cars, they made a special point of destroying high value easily removable parts from every car.

    From the article (each numbered point is a direct copy/paste from the linked WSH piece:

    1) Insurers covering Mazda’s losses wanted to be sure the company wouldn’t resell any cars or parts — thereby profiting on the side.

    2) So every steel-alloy wheel has to be sliced, every battery rendered inoperable, and every tire damaged beyond repair. All CD players must get smashed.”

    3) Steel-alloy wheels are sliced with high-power saws to make sure they won’t be resold. Holes are drilled into every tire.

    4) The cars get placed into a crusher that applies 25,000 pounds per square inch of pressure, flattening them into colorful slabs.

    5) The cars get placed into a crusher that applies 25,000 pounds per square inch of pressure, flattening them into colorful slabs.

    Next stop: Schnitzer Steel, a salvage yard down on the waterfront that’s home to an immense metal grinder. “You turn 7,000-horsepower hammers loose on them, and they’re eaten in 10 seconds,” says Jamie Wilson, Schnitzer’s manager. A bemused smile spreads across his face as another load of Mazdas disappears into its maw.

    Moments later, metal shards — most no bigger than an ashtray — sprinkle onto a mountain of scrap near Schnitzer’s dock. There, a freighter prepares to take the scrap back to Asia where it will get recycled.

  43. friendlynerd says:

    @MonkeyMonk:
    Food panty? Is that like edible underwear? And what would it want with my leftovers?

  44. mac-phisto says:

    trust me…you wouldn’t want one of these cars. my dad had a 240z back in the day ( [www.idcow.net] ). beautiful car, but the protectant used to ship the vehicles wasn’t applied correctly. the car rusted out from under him in less than a year.

    nissan actually made good on their mistake & replaced the vehicle, but that’s besides the point. the point is salt water is highly corrosive & as the story states, there’s no way to be 100% sure that the prolonged exposure didn’t cause problems somewhere.

  45. lowercase says:

    Cars aren’t meant to be parked on their sides for days on end. Mazda can never be sure exactly what stresses were put on those cars that they were not built for, including things like wheels and tires. Sure, stuff like the CD players might have been salvageable, but it’d probably cost them more overall to salvage them instead of just installing new ones in the new cars.

    These decisions were made 2 years ago too, when the economy wasn’t so bad and Mazda was selling some of their models as fast as they could get them stateside.

  46. ThunderRoad says:

    I was hoping for a huge Blues Brothers-like chase scene with these cars.

  47. 00exmachina says:

    @astraelraen: Close but wrong on the insurance payout. Depending on how they payout happened, they may have gotten a salvage payout, where the insurance company pay the value for the items but leaves them in possession of Mazda owner to do with what they will. They can either try to restore the item and use it, or have it destroyed. The insurance company doesn’t care after they payout. If it wasn’t a salvage payout the insurance company would have taken possession of the vehicles as part of the payout, and tired to auction them off to offset the cost of the payout on the items. Given the worries about safety issues my guess is Mazda received a salvage payout.

  48. guevera says:

    I can’t think of a legally safe way to donate these rides. I’m at best a mediocre mechanic, and I could easily swap in fake vin numbers and launder the title if I was a scammer. It’s a shame, because there’s got to be a way to do it, but I can’t think of one.

  49. ianmac47 says:

    The problem with this story is that Mazda is trying to protect their reputation– as though they had something to protect.

  50. GrandizerGo says:

    @astraelraen: No it’s not, if they didn’t reimburse the insurance company it would have been.

    If the insurance company paid out on the cars, which I doubt else Mazda doesn’t own them to destroy them, then they likely paid a smaller price knowing that the disassembly of NEW cars would still have a salvage value to Mazda.
    I doubt the glass, the rubber tires and many other parts are unusable.
    They are removing the wiring and the electronics sure, but most of the rest of the car is probably back on the factory line for reuse.

  51. unklegwar says:

    Good for Mazda for making sure a bunch of potentially bad/unsafe cars never make it into use.

  52. amorde says:

    I applaud Mazada for doing this. They actually care enough about their reputation to destroy the cars. Try this with an American car maker, GM or Chrysler. I doubt they would do the same.

  53. trujunglist says:

    @TechnoDestructo:

    I assume that they’ll be recycling materials since they’re disassembling the cars, not just crushing them into squares.

  54. @Buran:

    I think you’re missing my point.

    This is, obviously, incredibly wasteful resource-wise, but that was not what my post was taking issue with.

  55. @trujunglist:

    I hope they shoot them at the moon. The moon needs more scrap metal.

  56. pete7919 says:

    This story was great in Wired mag. It reminded me of this one:

    [www.tricolorsalvage.com]

    Same deal except the Tricolor sank all the way and they cut it into pieces with a diamond encrusted rope. They cut right through the cars in the hold and everything. Then they had a huge crane pick up the pieces and cut them up smaller on land. Lots of great pics of destruction on the website above.

  57. bdgbill says:

    Mazda did the right thing. It is not hard to imagine a story on The Consumerist titled “Mazda Sells Cars From Half Sunken Ship as New. Buyers SOL”

    It is unfortunate that a guy died to save that ship. Seems like everyone would have been better off if it had just sunk.

  58. bdgbill says:

    @Voyou_Charmant: “Boo Hoo – LEAVE TRIAL LAWYERS ALONE!”

    If you would like just one example of why nobody respects trial lawyers…How about the Florida case of the woman spilling hot coffee on herself and successfully suing Mcdonalds?

  59. joellevand says:

    Mazda absolutely did the right thing.

  60. elisa says:

    @bdgbill: Re the Mickey D’s case: McD’s deliberately kept their coffee at superhot (scalding) temps, 700 previous ppl had gotten serious burns, the person suing got 3rd degree burns, etc etc. Yeah I expect coffee to be hot, but I don’t expect it to burn away my skin in seconds if I spill it. More info: [www.lectlaw.com]

  61. Rusted says:

    @Buran: Mazda did the right thing. Any part from those cars would be suspect and if installed in another vehicle that was in an accident, lawyers would be having a feeding frenzy.

    The right thing was done and the raw material will be recycled into something else.

  62. MARTHA__JONES says:

    @bdgbill: Before you cite this case as an example you should really read the case notes to understand it.

    -The woman in question did something stupid by putting the cup between her legs, yes.
    -However, there was a precedent of McDonalds serving coffee at dangerous temperatures, they had been repeatedly told they should not be doing this and didn’t listen.
    -The woman suffered third degree burns.
    -The intent was to teach McDonalds a lesson not to endanger their customers.
    -The amount awarded was the amount McDonalds makes from the sales of coffee in on day.

    There are examples of ridiculous, irresponsible litigation, but this is not one of them.

  63. vision4bg says:

    Mazda “to” destroy? Or rather, Mazda *has* destroyed.