LONDON (Reuters) - 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.
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.
“We do not comment on individual companies,” Atradius said in an emailed statement.
However, it added: “The current economic environment is tough, and car manufacturers are among those being hit by the financial slowdown. We are pulling back cover in some cases as an absolute last resort, but we are continuing to work with businesses to keep trading going as long as possible.”
No one at Euler Hermes and Coface was immediately authorized to comment.
GM and Ford are two of the biggest groups ever to be blacklisted, the FT said, adding that the cut-off of cover would primarily affect the companies’ large operations in Europe, where the insurers do the bulk of their business.
U.S. suppliers largely operate without insurance, the newspaper said.
Earlier this week, Atradius said it had cut back its provision of credit insurance for companies supplying some retailers, hitting shares in British electrical goods retailer DSG International Plc.
Reporting by Andrew Callus and Mark Potter; Editing by David Holmes/Will Waterman