Mexico's booming car industry selling unsafe cars

Lax safety requirements in Mexico and Latin America lead to surge in auto-related fatalities
Associated Press
Nov 29, 2013

In Mexico's booming auto industry, the cars rolling off assembly lines may look identical, but how safe they are depends on where they're headed.

Vehicles destined to stay in Mexico or go south to the rest of Latin America carry a code signifying there's no need for antilock braking systems, electronic stability control, or more than two air bags, if any, in its basic models.

If the cars will be exported to the United States or Europe, however, they must meet stringent safety laws, including as many as six to 10 air bags, and stability controls that compensate for slippery roads and other road dangers, say engineers who have worked in Mexico-based auto factories.

Because the price of the two versions of the cars is about the same, the dual system buttresses the bottom lines of automakers such as General Motors and Nissan. But it's being blamed for a surge in auto-related fatalities in Mexico, where laws require virtually no safety protections.

"We are paying for cars that are far more expensive and far less safe," said Alejandro Furas, technical director for Global New Car Assessment Program, or NCAP, a vehicle crash-test group. "Something is very wrong."

In 2011, nearly 5,000 drivers and passengers in Mexico died in accidents, a 58 percent increase since 2001, according to the latest available data from the country's transportation department. Over the same decade, the U.S. reduced the number of auto-related fatalities by 40 percent. The death rate in Mexico, when comparing fatalities with the size of the car fleet, is more than 3.5 times that of the U.S.

Nevertheless, Mexico hasn't introduced any safety proposals other than general seat belt requirements for its 22-million strong auto fleet. Even then, the laws don't mandate three-point shoulder belts necessary to secure child safety seats.

Brazil and Argentina, on the other hand, have passed laws requiring all vehicles to have dual front air bags and antilock braking systems by next year.

An Associated Press investigation this year found that Brazil's auto plants produce cars aimed at Latin American consumers that lack basic safety features. Like Brazil, Mexico doesn't run its own crash test facility to rank cars' safety before they hit the road.

Dr. Arturo Cervantes Trejo, director of the Mexican Health Ministry's National Accident Prevention Council, said the country has a long way to go to upgrade safety standards, but challenging the nation's $30 billion auto industry could be difficult.

"It's a complicated subject because of the amount of money carmakers bring to this country. The economy protects them," Cervantes told the AP. "But there are plans, there is a strategy. We have a working group with the car industry."

Auto plants cover a swath of central Mexico, cranking out about 3 million cars a year while lifting into the middle class auto hubs in the states of Aguascalientes and Puebla. In a matter of a few years, Mexico has become the world's fourth biggest auto exporter, despite having no homegrown brands, and the country's car fleet doubled between 2001 and 2011, the latest national figures show.

In fact, consumers in "first-world" countries are paying the same or even less for safer cars.

For example, basic versions of Mexico's second most popular car, the Nissan Versa, made in central Aguascalientes, come with two air bags, but without electronic stability control systems, which use sensors to activate brakes when a car loses control.

The sticker price of the newer generation of the sedan comes to $16,000. The U.S. version of the same car has six air bags in the front, on the sides and mounted in the roof, in addition to an electronic stability control system. That sticker price is about $14,000.

Similarly, the basic version of the Chevrolet Aveo, which has been revamped and renamed Sonic, sells for about $14,000 in the U.S. and comes with 10 air bags, antilock brakes and traction control. Its Mexican equivalent, the country's top-selling car, doesn't have any of those protections and costs only $400 less.

Nissan Mexicana spokesman Herman Morfin said in a statement it is "common practice" to add different features, depending on the intended market.

"Because there are many choices of specifications and equipment, specific marketing strategies by country, in addition to the tax difference among countries, states and cities, also including transportation and delivery costs, it's not possible to make a direct comparison among vehicles sold in each market, based on the list price published on the Web," Morfin said.

Morfin said two of Nissan's most popular models — the Versa and the Sentra — are packaged with two air bags and an antilock braking system, which is more than what's required by the Mexican government.

While GM declined repeated requests to comment, an engineer who headed a manufacturing division at the company in Mexico until last year said the company saved on costs by not adding safety features.

"For the company to make more net profit and so that cars are sold at more affordable prices, we would toss aside some accessories. Air bags, ABS brakes, those were the first to go," the engineer said. He spoke on condition of anonymity, citing a confidentiality agreement with the company.

Three other engineers who worked with Nissan and GM for four years and are still involved in auto design for other carmakers were interviewed on similar conditions of anonymity, and they confirmed the companies built cars with vastly different safety features depending on where they'd be sold.

The U.S. National Highway Traffic Safety Administration said air bags and electronic stability control have prevented tens of thousands of injuries in auto accidents and reduced fatal crashes by as much as a third in the U.S.

Paco de Anda, the director of the Mexican chapter for the accident-prevention group Safe Kids, said Latin American consumers have to pay extra for those protections.

"Features that are already mandatory in other countries, here they are selling them as optional items," De Anda said. "People here have no education about road safety ... so they don't pay for it."

A GM worker who gets paid $100 a week said people in Latin America cannot afford to buy cars that are fully loaded with safety features.

"We're not first-world countries," said the worker, who asked not to be identified because he was afraid of losing his job at the GM plant in the town of Ramos Arizpe, where Chevrolet Sonics, Cadillac SRXs and Captiva SUVs are assembled.

Yet crash test results show exactly what's being sacrificed for savings.

One of Nissan's most popular models in Mexico, the Tsuru, is so outdated it has only lap seat belts in the back and some versions have no air bags at all. The car is not sold in the U.S. or Europe.

At a recent Latin NCAP crash test presentation, the Tsuru's driver's door ripped off upon impact at only 37 mph. Its roof collapsed and the steering wheel slammed against the crash test dummy's chest. The Tsuru scored zero stars out of a possible five.

When asked about the crash test, Nissan representatives replied in an email that "consumers continue to ask for it because of its durability, reliability and affordability," without responding specifically to the test results. More than 300,000 Tsurus have been sold in Mexico in the past six years, at about $10,000 each.

Carlos Gomez and his wife Diana Martinez were driving their two small children in a red Tsuru from their northern Mexican town of Doctor Arroyo across the length of Mexico to Chiapas state for Holy Week holidays in March. The sky turned dark as they neared central Mexico, and less than 250 miles from home they were hit head-on by a drunken driver in a red Ford Ranger pickup truck.

The couple died from chest and head injuries; the steering wheel struck Gomez's chest and the dashboard crushed his wife's head. The children survived but spent weeks in the hospital. Six-year-old Carlos still wears a cast from the waist down. He cannot walk.

"Their car was way worse off than the car the other boy was driving," said the mother's brother, Agustin Martinez. "We want more robust cars."

The family said the investigation didn't determine whether air bags would have saved the parents' lives, but there was an air bag in the truck that struck them. The driver was not injured.

Furas, of Global NCAP, said changing automaker behavior will require the region's few watchdog groups and especially government regulators to apply far more pressure on automakers.

Volkswagen, for one, began adding two air bags to its Clasico model after the German carmaker learned that Latin NCAP was going to choose the car for crash testing because of its popularity, Furas said. The model sold in Europe and the U.S. as Jetta comes standard with six air bags.

"Mexico has to take a good look at itself, at the problems it's facing," Furas said. "It is selling unsafe cars to its own people, when it can be selling safe cars that it can build."

 

Comments

looking around

"Because the price of the two versions of the cars is about the same, the dual system buttresses the bottom lines of automakers such as General Motors and Nissan. But it's being blamed for a surge in auto-related fatalities in Mexico, where laws require virtually no safety protections."

Corporate greed and a republicans utopia a place where there exists no rules, regulations,laws or unions governing how they do business.

"A GM worker who gets paid $100 a week said people in Latin America cannot afford to buy cars that are fully loaded with safety features.

"We're not first-world countries," said the worker, who asked not to be identified because he was afraid of losing his job at the GM plant in the town of Ramos Arizpe, where Chevrolet Sonics, Cadillac SRXs and Captiva SUVs are assembled."

"Dr. Arturo Cervantes Trejo, director of the Mexican Health Ministry's National Accident Prevention Council, said the country has a long way to go to upgrade safety standards, but challenging the nation's $30 billion auto industry could be difficult.

"It's a complicated subject because of the amount of money carmakers bring to this country. The economy protects them,"

Contango

Re: "Corporate greed and a republicans (sp) utopia"

Thought Pres. Obama "saved" GM?

Better tell the auto union (UAW) pension and health care trusts to dump their GM stock so that they don't appear greedy.

http://abcnews.go.com/Business/s...

Maybe the Mexes are just lousy drivers?

looking around

"Better tell the auto union (UAW) pension and health care trusts to dump their GM stock so that they don't appear greedy."

The UAW would never be so greedy as not to organize these workers in a heartbeat and promote public organization to develop regulations protecting the worker, consumers and the environment of their country. Now that is a republican nightmare! As far as Obama "saved" GM? and your point is?

Contango

Re: "The UAW would never be so greedy,"

Again: The UAW owns GM stock. They're part of the corp. "greed" aren't they?

So why isn't the UAW down in Mex. organizin'?

Since Pres. Obama "saved" GM, aren't he and Democrats culpable for this "greed" and not the Repubs?

looking around

Obama didn't "save" GM, he saved thousands of jobs by helping the industry to survive bankruptcy, at the same time community's depending on these jobs were also "saved" thus giving an opportunity for economic recovery from the collapse brought on by the Bush years.

Just because part of the reorganization resulted in the UAW taking over the management of various benefits programs, and accepted stock as part of the financial transaction does not make them part of corporate greed that they have no say in.

For years the labor force has shown it's loyalty to the company buy purchasing the products that they help build. They also invested in company stock. I have always asked, why would a working man think he is a republican? The republican party never willingly did anything to promote the well being and advancement of the common man and worker.

As to why the UAW has not organized Mexican workers, it is self evident in the quote provided earlier, fear of retribution by the company. It would take another battle on the bridge, and perhaps in time it will.

Contango

Re: "does not make them part of corporate greed that they have no say in."

17.5% ownership in GM makes the UAW retirees' health plan (VEBA) a MAJOR stockholder.

"Via its pension trusts, the union actually owns big stakes in GM and Chrysler,"

http://www.edmunds.com/autoobser...

"The Voluntary Employees’ Beneficiary Association, responsible to the UAW for retiree health care, already has representatives on boards of both the restructured GM and Chrysler."

http://www.thedetroitbureau.com/...

Ya better check also: Wanna bet that many public employee union pension trusts also own GM stock?

looking around

While you may consider 17.5% a major stake, it hardly qualifies as a majority, and surely won't turn the tides of corporate mind set. As to why workers would buy stock, I would say that they have belief in themselves and the products they build that once again sales will come out on top. They hope the value of their stock ownership will rise, although not at the expense of others short falls unlike the company itself who would do so by taking advantage of under regulation and cheap labor.

Contango

Re: "They hope the value of their stock ownership will rise,"

How is that not "greed"?

And yes, a 17.5% ownership throws around a lot of weight.

Contango

Re: "They also invested in company stock."

Why would they buy stock in a "greedy" co.?

Contango

Re: "Obama didn't "save" GM,"

He didn't?

Where were some of those "thousands of jobs" at except GM and Chrysler?

The Big Dog's back

pooh will never concede on anything. That's why you can't have an intelligent discussion with him.

Contango

Re: "intelligent discussion"

Good morning Sunshine!

When you can start and/or engage in one let me know. :)

44846GWP

How's that five year car loan going? lol!!!

Contango

Re: "How's that five year car loan going?"

Fine. Thanks for asking.

Still "free" money being paid for with deflated dollars, while my investments grow at a 12% YTD clip.

You on the other hand have a depreciating vehicle.

2cents's picture
2cents

12%, I'm in : )

thinkagain

12%? Must be a conservative portfolio.

My health care stock portfolio is up over 50% YTD. Overall, I’ve seen a 25.68% increase in investments.

Contango

Re: "Must be a conservative portfolio."

More like balanced.

60/40 - equities-to-fixed. Little heavier in cash than I would like. Waitin' for interest rates to rise.

Beatin' the majority of hedge funds - works for me.

44846GWP

My vehicle, paid for. Your vehicle, you owe more than its worth. A vehicle is not an investment to make money, its to get you from one place to another.

Contango

But Zippy, the thousands I didn't spend (unlike you) is APPRECIATING. :)

Ya read like a dumb cheap German who'll never be wealthy.

Nemesis

Big dog,

Kettle to pot: Color check, over.

YoMamma

Where are the unions in Mexico? If they had unions I bet the cars would be safe. The unions are the best ever, that guy would be making more than $100/week too!

Pterocarya frax...

While you may be trying to be funny, you are actually correct. Thanks.

Nemesis

No, he'd be out of work.

Contango

Re: "making more than $100/week too!"

AND the vehicles would be even more expensive than they are currently.

Contango

Re: "If the cars will be exported to the United States or Europe, however, they must meet stringent safety laws,"

Good to know that GM likes to import vehicles from Mex. and "steal" American jobs huh?

Why isn't the UAW which owns GM stock doin' sumpthin' about this?

grumpy

"Why isn't the UAW which owns GM stock doin' sumpthin' about this?"

The corporate branch of the UAW is currently working on plans to cut the wages of the new hires to GM Mexico from $100 a day to $55 a day to shadow what it is paying the new hires for GM USA much like the pay scale for old GM compared to New GM in the USA. After all UAW must preserve it's profit for the good of UAW management. Thank you for your concern.

Signed,
You UAW Management Team (we are here for your own good, someone needs to tell you how to live your lives besides your gov't)

The Big Dog's back

Don't like a UAW shop, don't work for one. Tell your kid that too. I would imagine though that he would tell you to MYOB and put it where the sun don't shine.

grumpy

" I would imagine though that he would tell you to MYOB and put it where the sun don't shine."

Nope he laughs like &ell and says the fools just starting at GM walked into it with their eyes wide open. The employees hired under Old GM are laughing all the way to the bank, along with the UAW management team running GM, who are screwing the New GM hires, who do the same exact thing for a little more than half of what the New GM hires get. And they STILL call each other, union BROTHERS and SISTERS. Sounds like incest to me when you screw your brothers and sisters

deertracker

Give it a rest with all the stock talk. Why wouldn't the UAW own stock? Get over it. Facts are they send YOUR job to Mexico because it is cheaper but you get a cheaper product. Say what you will about regulations, they are necessary. America and Americans have only themselves to blame for all this mess.

2cents's picture
2cents

"America and Americans have only themselves to blame for all this mess."

I have to agree there, greed across the board, from the bottom McDonald's worker to the highest paid whatever, CEO or politician!

grumpy

They own enough stock to have a seat or so on the board of directors of a company whose workers are members of the union. They decided to pay new hires doing the same job half of what they pay others doing the SAME job in the plants. This is how your UAW represents its members. Ain't you proud of your union brothers and sisters who are in charge?

The Big Dog's back

As usual you rattle off with no facts. There are no union people on GM's BOD.

Contango

"The VEBA trust, not the UAW, will hold stock received from each company, and has the right to nominate – with UAW approval – a member of the board of directors at GM and at Chrysler."

http://www.uaw.org/story/veba-fu...

grumpy

Thanks, I lost that link to the VEBA trust. I was sure how I worded my statement by saying the UAW had enough stock to have a seat on the board and NOT say they HAD a seat and then couldn't find the link stating that like yours did. the UAW allowed the split in salary and benefits for the NEW hires being about half of OLD GM hires. Your modernized UAW at work, agreeing to pay half of what they used to.

I do agree with piddle puppy though that the new hires knew they are getting screwed by comparison when they signed up with the UNION for the new GM jobs. They just like getting screwed by the UAW. The new normal for unions, the old workers screw the new ones, much like obamaSCARE screwing the young by forcing them to pay extra so the oldsters (who have a higher voting percentage than the young) can pay less and those poor can get free health insurance. The gov't and unions are screewing the young... again, with NO foreplay, or cuddling after.

The Big Dog's back

The teathug branch of the UAW allowed the split wage to happen. The I got mine the heck with you teathugs.

grumpy

"The teathug branch of the UAW allowed the split wage to happen. The I got mine the heck with you teathugs."

This is how the compassionate UAW sees it's BROTHERS and SISTERS who are screwing their own. Seems rather incestuous to those outside of the UAW looking in. One group (those hired by Old GM) screwing the new guys (doing the same work for half the wage rate) hired after the gov't gives 17.5% of the company to the union... and they still call each other brother and sister. The new UAW on display. It has started with GM and Chrysler, I wonder when it starts becoming the new normal for the new UAW? Piddle Puppy will be so proud of the strides the new UAW is making.

The Big Dog's back

And here I thought the BOD made the decisions.

grumpy

"And here I thought the BOD made the decisions."

Name me another union that would allow one union member, working in the same plant, doing the same job, getting half the wage rate of another union member. I will be waiting with bated breath till you reply. And they still call each other brother and sister. Quite the incestuous bunch screwing their brothers and sisters like that. The old timers getting twice what the newer hires get. The new UAW in action. I wonder what company will be next for the UAW to agree to such a wage scale?

grumpy

"The teathug branch of the UAW allowed the split wage to happen. The I got mine the heck with you teathugs."

Missed thinking of this yesterday.

Piddle Puppy, are you now claiming that the tea party has taken control of the UAW management? If so which UAW management are the ones who you consider teathugs? Is it a growing majority? It must be a majority for them to pass a decesion that screws their BROTHERS and SISTERS like this. Is the management teathugs or just incestuous ba$tards? Is this the new UAW we can expect to see from now on? As I asked earlier which of the UAW management are the teathug crew? Bet you won't answer. Run from your statement, Piddle Puppy, run and hide.

Really are you ...

The auto industry is taking it to whoever they can to keep stockholders happy. If someone buys a share or two, that is green. Then someone else sells ten or fifteen shares, then that is red. Where are they getting the money to cover the red? Cheap labor in some third world country. With no regulations in those third world countries the automakers can turn profits by selling those people automobiles with a lot of cut corners. It is bologna knowingly turning out junk anywhere.

KURTje

Mexico is a GOP delight. Pollute, exploit. Grumpy saw the oldsters *hit on lower seniority. They wanted it both ways...gimmie the decent Union pay & bennies & *ell with lower seniority. The company laughed at all of them. In greed they trust. Most only think of self.

grumpy

" Grumpy saw the oldsters *hit on lower seniority."

As I stated before, the union I was in seniority wasn't recognized. If you could operate the machine you were fine. If you couldn't no one would work near you and you were gone from the job. If you were good you could negotiate a bonus... if you were good enough, safe enough, and fast enough.

Seniority is for those who can't work safe enough, good enough, fast enough, to keep a job on the skills. I believe in the ability to stand on my own in my trade. If someone can't pull their own weight I am not going to prop him up. He can go back to the apprentice school and re-lean what he should already have learned before becoming a journeyman. It is HIS responsibility to keep his skills up, not up to me.

Who holds your hand when you can't do your job? Are you that weak and needy to not be able to do your job that you need someone to stand up with yopur incompetence?

I would rather stand on my own and have the union do what we have allowed it to do. I have told you several times what we have the union do for the members. It is how we, the members prefer it to be run. Those that can't do the work can go back to school and learn what they need to run the equipment.

EDIT

The school is free for union members.

The UAW/GM decesion to pay new hires half of old GM hires was negotiated between GM the gov't and the UAW. The UAW agreed to screw their newly hired BROTHERTS and SISTERS, and make an upper class worker and lower class worker doing the same work in the same plant, working for the same company, represented by the same union. They didn't even use lube on their new BROTHERS and SISTERS. This is the UAW' future. The new UAW at work.

I wonder if the new hire GM workers have to pay the same dues the old hire GM workers pay, even though they get half the wage rate?

The Big Dog's back

So, should the workers all be making the same higher rate or the same lower rate?

grumpy

I am not a representative of GM, an incestuous UAW union leader, nor an incestuous member of the UAW who are screwing their union BROTHERS and SISTERS. That would be up to them to negotiate that. The gov't used to have a big say in the matter, but they sold much of their stock... at a loss, from when they acquired it. it is up to those folks, who have skin in the game to negotiate there wages and benefits.

Do you consider it fair for the union to allow one set of workers, in the same plants, doing the same work, for the same company, represented by the same union to have some be paid twice what others are paid?

Also you haven't told us who those teathugs are in the UAW administration that allowed such a wage difference. Who are those teathugs you spoke of? How did they garner so much power to pass such a thing? Please enlighten the rest of us as to who these powerful UAW administrators are. Youy seem to know something no one else does, please share who they are Piddle Puppy. Or will you run and hide from your earlier pronouncement? Bet it will be the latter.

grumpy

"So, should the workers all be making the same higher rate or the same lower rate?"

So Piddle Puppy I did my answer to your question and am still waiting for you to answer mine about who the teathugs are in the UAW administration?

Also pertaining to the quoted question you asked me... Are you happy with the UAW having new hires doing the same work, in the same plant, for the same company, being represented by the same union get half the wage rate as some others? This started out as just a few new hires, but over time retirements, deaths, and whatnot will cut the costs to GM quite a bit. Does this sound like a good deal the incestuous UAW made? How would YOU resolve it? Did the UAW sell out the members for 17.5% of the GM stock? Will you answer or will you run and stick your head in the ground? Bet it will be the latter choice. Remember when you stick you head in the ground your hindquarters will be sticking up in the air.

The Big Dog's back

pooh, the members voted for it. Are you that mentally challenged that it has to be spelled out for you? And you still didn't answer my question. Stop deflecting.

grumpy

I got no dog in the negotiation. I am not a UAW member, don't own GM stock and don't really care. But to me the pay should be the same for doing the same work, for the same company and being represented by the same union. How they decide to make the split is up to them but if you wish it to be "fair"...

Of course the members voted for it. The members who were there, and voted for it were the old GM hires that got twice as much pay. They were simply greedy. They could have taken a pay cut that allowed the new hires to make the same as they did, just not as much as they used to. But instead they screwed the new union BROTHERS and SISTERS. They didn't use lube, nor cuddle afterwards. They got theirs and screwed those following in their footsteps. Is that the new UAW way of treating new members? Actually from the outside I would think that the "fair" way would have been for the old GM workers to take a cut enough to allow the few new hires to make more than they do now, and the old GM hires a little less than they do now. That way the new workers would be getting more and the old would be getting a little less.

Now answer my question, who are these teathugs in charge of the UAW? You keep deflecting. YOU made the statement, back it up.It had to be some people in the UAW administration who brought it up and got the ball rolling. Or is it just in your fevered dreams that told you that? You made thew statement, now back it up.

grumpy

" Are you that mentally challenged that it has to be spelled out for you?"

Yes spell it out for me and include the part where some teathug wing proposed the wage split and got it on a ballot. Include the names of the leaders in this imaginary "wing" of the UAW. Make sure it is the workers of GM since those are the ones who voted. Please spell it out with small short words so we can all be dazzled by your brilliance, also add where you got this information about this special "wing" of the UAW, remember we want to see where and how you got your information. I am sure no one would think you just made that up.

grumpy

" Are you that mentally challenged that it has to be spelled out for you?"

Yes spell it out for me and include the part where some teathug wing proposed the wage split and got it on a ballot. Include the names of the leaders in this imaginary "wing" of the UAW. Make sure it is the workers of GM since those are the ones who voted. Please spell it out with small short words so we can all be dazzled by your brilliance.

grumpy

doubled

Harley

I don't think we should care about Gop Democrat Union this and that. Thease are human beings driving substanderd cars south of the border. If GM is making huge profits off of this after good money was paid for one of there cars they should be held accountable for this immoral practice. I also think this is just bad karma for GM or any company that does this.