I saw this article, not good news at all for the auto maker. Reminds me of how recently, before Circuit City went kaput, Sony ordered all of it's products en route to their stores to return back.
Euler Hermes Cancels Insur For GM, Ford Suppliers -Sources
FRANKFURT-(Dow Jones)- Credit insurer Euler Hermes (425403.FR) has canceled insurance protection for suppliers of General Motors Corp. (GM) and Ford Co. (F) , two people familiar with the matter told Dow Jones Newswires Monday.
According the sources, deliveries from the suppliers weren't covered by insurance in the last two weeks, as the risk of the car makers failing to pay them for deliveries is too high.
Today, up to two-thirds of auto parts aren't produced by the car maker itself, but by suppliers, who must take on considerable credits for that.
The cancellation of the insurance protection puts suppliers under additional pressure, making it more difficult for them to obtain loans. The suppliers might start demanding advance payment for their deliveries or set short-term payment deadlines.
General Motors and Ford both reported billions in losses Friday.