European parts suppliers lose their credit insurance
14 November 2008

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

  • 2017 Range Rover Velar
    First Drive
    23 July 2017
    The Range Rover Velar is the most road-biased car Land Rover has made. So does it still feel like a proper part of the family?
  • Seat Ibiza
    Car review
    21 July 2017
    A model upon which Seat has staked its future, the new Ibiza must now deliver
  • Honda Clarity FCV
    Car review
    21 July 2017
    Honda’s fuel cell flagship reaches its second generation, but is the world ready?
  • Nissan Qashqai 1.5 dCi 110 N-Connecta 2017 review
    First Drive
    20 July 2017
    A UK drive in Nissan’s crucial crossover shows an update has not cost it any of that which makes it sell so well
  • Seat Ibiza 1.0 MPI
    First Drive
    20 July 2017
    The Seat Ibiza has wowed in other iterations, but how will the entry-level 1.0-litre MPI version stack up in the UK? We've been to north Wales to find out