The flow of credit from financial institutions all but froze starting in late 2008, and although it has thawed somewhat, suppliers' financial risk remains at the top of their corporate customers' concerns. What happened in the car industry as the credit crisis struck in the fall of 2008 was a harbinger of the closer ties that now bind companies to their suppliers. Plummeting car sales had dire ramifications for parts suppliers, many of which depend on their sales to the manufacturers.
French carmakers Renault and PSA Peugot Citroen publicly promised support for their suppliers. And in 2009, BMW helped bail out Edscha, a German manufacturer of sunroofs the luxury car company uses in its Z4 convertible.
The lack of demand for their products, coupled with the financial crisis, squeezed and sometimes turned off parts suppliers' bank credit, prompting their customers to take quick action.
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