Three big European credit insurers have removed cover from suppliers of troubled U.S. carmakers General Motors Corp. and Ford Motor Co., the Financial Times reported on Friday.From the Globe. If this is true (and in the absence of sources it's hard to separate facts from mere rumours) this is really big. Either a bailout or a nationalization seems inevitable; the US will not likely allow those companies to fail, and probably won't allow them to be taken over by Toyota or Honda either (assuming that those companies even want to make such a risky investment in this climate).
The withdrawal of credit insurance, which covers suppliers against the risk of the car companies failing, was undertaken by Euler Hermes, Atradius and Coface, which control more than 80 per cent of the world's credit insurance market, the newspaper said.
The three are refusing to write policies for suppliers trading with GM or Ford on credit, it reported, without citing sources.
Friday, November 14, 2008
Insurers pull cover from suppliers to GM, Ford
This is not good news for the US auto industry: