European parts suppliers lose their credit insurance

The crisis at Ford and GM deepened today, with news that insurers have pulled credit cover from their suppliers.

Atradius, Coface and Euler Hermes, which control more than three-quarters of the world's credit insurance, withdrew policies that protect European suppliers if the car makers fail to pay their debts.

Insurers, who profit from selling every insurance policy, typically make this move as a last resort, because they believe that there is a significant likelihood of the company not honouring its debts.

Withdrawal of credit insurance is often the final straw as an ailing company tries to maintain its production cycle.

Either the current suppliers can trade without insurance, as they do in the US, or they can insist on up-front payment.

A government bail-out for the Detroit makers is still a long way off, as there is not enough Republican support for the move.

Senior Republican Richard Shelby summarised the party's view: “The financial situation facing the Big Three is not a national problem, but their problem.”

Add your comment

Log in or register to post comments

Find an Autocar car review

Driven this week

  • First Drive
    1 September 2015
    Kia has developed a better-mannered, more sophisticated Sportage for 2016
  • First Drive
    31 August 2015
    Thought the 3 Series was losing its edge? Well it's back, with a facelifted version that offers improved performance and dynamics. Does it reclaim its top spot after our drive on UK roads?
  • First Drive
    27 August 2015
    BMW gives its flagship 7 Series an extensive overhaul in a bid to tempt buyers of luxury cars away from the Mercedes S-Class, Audi's A8 and the Jaguar XJ
  • First Drive
    26 August 2015
    New Qashqai rival majors on practicality and usability and benefits from a long warranty, but lower-specification versions are the better bet
  • First Drive
    26 August 2015
    Go-faster Bentley Continental feels effortlessly quick despite its considerable weight