Troubled US carmakers General Motors and Ford Motor have been given a potentially devastating vote of no confidence by three big European credit insurers, which have removed cover from their suppliers.
The withdrawal of credit insurance – which covered suppliers against the risk of the car companies’ failing – has previously hastened the demise of a string of European companies, with suppliers to retailers and construction companies finding cover increasingly hard to come by.
The report published from ft.com, goes on to point out that this will impact primarily the European operations where the bulk of debts are insured.
Read the full story at ft.com
1 comment:
Industry has come up against a brick wall recently when applying to increase cover due to spiraling cost of raw material. Credit insurers have failed to underwrite new cover or increase limits for the last few months. This alarming news does not bode well for industry in general as world economies revolve around automotive sector and the ability of countries to produce and market something consumers want to buy - not financial institutes as one as been led to believe by the latest round of media scaremongering.
Economies will not be buoyant whilst speculators are playing with at best monopoly money and at worst thin air.
The belief in the U.K. that the financial institutes were the bedrock of the economy as now proven to be an ill found illusion
The growth in the emerging economies is as been as a result of growth in industry. IMF is now at the behest of such economies to shore up its funds.
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