Jaguar Land Rover (JLR) has officially announced that production across its manufacturing facilities will remain halted until at least the beginning of next month.
The UK’s Business Secretary and Industry Minister visited the West Midlands on Tuesday, marking their first visit since the recent cyber-attack, to engage with JLR and its supply chain partners.
The automotive giant has been unable to manufacture vehicles since the cyber incident at the end of August, which compelled the shutdown of its IT networks. Concerns are escalating that some of its suppliers may face insolvency without adequate support.
JLR has confirmed that operations at its factories, including its UK-based plants in Solihull, Halewood, and Wolverhampton, will not resume before October 1st.
“Our priority remains on supporting our customers, suppliers, colleagues, and our retail partners, who continue to operate,” JLR stated in a formal communication confirming the extension of the production stoppage.
“We fully acknowledge that this is a challenging period for all stakeholders connected to JLR, and we extend our gratitude to everyone for their ongoing support and understanding.”
Sources previously informed the BBC that the disruption could potentially extend into November.
Industry Minister Chris McDonald stated that the visit, conducted alongside Business Secretary Peter Kyle, provided an opportunity to “listen to the workforce and determine how we can offer assistance and facilitate the resumption of production.”
During a visit to Webasto, JLR’s roof supplier in Sutton Coldfield, McDonald conveyed to the BBC that he had engaged in discussions with managers and owners within the firm’s supply network.
“It is imperative that we respond to the insights provided by business owners… it is crucial that we collaborate with businesses rather than imposing solutions upon them.”
He also noted that JLR is currently receiving support from the National Cyber Security Centre and the National Crime Agency.
The production halt is estimated to be costing JLR at least £50 million per week. Politicians and union leaders have cautioned against the potentially devastating repercussions for certain businesses within the supply chain, especially smaller enterprises.
Prof David Bailey, a professor of business economics at the University of Birmingham, asserted that “the government will inevitably bear some cost” from the shutdown, whether through a furlough scheme, loans, or an increase in welfare expenses if staff reductions occur.
“If segments of the supply chain collapse, resuming operations at JLR will become significantly more difficult,” he told BBC Radio WM.
He added that some of JLR’s suppliers are very small businesses that could “literally run out of money” if the shutdown persists.
Steve Whitmarsh, the chief executive of Run Your Fleet, a Solihull-based firm specializing in breakdown services and corporate car rentals, told BBC Radio WM that he believes government intervention is “inevitable” due to the potentially severe consequences.
“If we lose that supply chain, [we’re] not going to get it back. The impact on the economy and the taxpayer will be far greater than short-term assistance.”
JLR’s three factories in Britain typically produce approximately 1,000 vehicles per day.
Antonia Bance, the Labour MP for Tipton and Wednesbury, expressed concerns about the risk of “a disintegration of the entire supply chain into JLR.”
“When JLR resumes operations and is ready to proceed… some segments of the supply chain may not be ready, potentially due to the loss of skilled labor or the insolvency of certain businesses,” she stated.
The Liberal Democrats have urged the government to intervene. Helen Morgan, the Lib Dem MP for North Shropshire, emphasized that “the automotive industry is of paramount importance to the West Midlands and the broader economy.”
JLR’s UK plants directly employ approximately 30,000 individuals, with an additional 100,000 employed within the firm’s supply chain and 60,000 reliant on the spending of these workers.
The company is currently spearheading support efforts for its own supply chain, without direct state intervention.
Members of Parliament representing constituencies across the West Midlands and Merseyside, where JLR maintains production facilities, have called upon the Business Secretary to consider providing loans similar to those offered to businesses during the COVID-19 lockdown.
Conservative MP Saqib Bhatti, whose Meriden and Solihull East constituency hosts a JLR plant, stated that “failure” to support the carmaker’s suppliers “could have really significant economic consequences” for the West Midlands.
Unite, one of the UK’s largest trade unions, has advocated for a furlough scheme for the employees of JLR suppliers, following reports that some workers were being instructed to apply for Universal Credit.
Unite reported that staff layoffs with “reduced or zero pay” have occurred in the wake of the cyber-attack.
West Midlands and Merseyside MPs are advocating for supply chain support following the JLR cyber-attack.
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