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The government is exploring avenues to provide financial assistance to companies within Jaguar Land Rover’s (JLR) supply chain, sources confirm.
JLR suspended vehicle production in late August following a cyber attack that forced the shutdown of its IT networks. Factory operations remain halted, with resumption not anticipated until at least next month.
Concerns are mounting that certain suppliers, particularly smaller enterprises heavily reliant on JLR’s business, could face potential insolvency without intervention.
One potential solution under consideration involves the government purchasing component parts manufactured by these suppliers, aiming to sustain them until JLR’s production lines are operational once more.
While unions advocated for a Covid-style furlough scheme, ministers have reportedly dismissed this option due to projected costs, according to BBC sources.
Another possibility being evaluated is the provision of government-backed loans to suppliers, although this option is reportedly less favored by the suppliers themselves.
The government is also contemplating the purchase and stockpiling of car parts, though this approach presents considerable logistical challenges.
JLR’s manufacturing process is predicated on a just-in-time delivery system, ensuring the correct parts arrive at the precise location when needed.
Industry experts concur that inaction could place firms within the supply chain, which collectively employs tens of thousands of workers, at risk of bankruptcy.
The Business and Trade Select Committee is scheduled to convene on Thursday afternoon to hear testimony from businesses within JLR’s supply chain, reflecting significant apprehension regarding their continued viability.
This evidence will subsequently be shared with the government for consideration.
Senior government officials are increasingly concerned about a pattern of cyber attacks targeting UK institutions and businesses, including the British Library, Marks & Spencer, and the Co-op.
A group identifying itself as Scattered Lapsus$ Hunters has claimed responsibility for the cyberattacks on JLR, Marks & Spencer, and Co-op.
An investigation is currently underway into the cyber attack on JLR, which is estimated to be costing the company at least £50 million per week in lost production.
Under normal circumstances, JLR expects to manufacture over 1,000 vehicles daily across its three factories located in Solihull, Wolverhampton (West Midlands), and Halewood (Merseyside).
However, employees were dismissed following the cyber attack – which initially came to light on September 1st – with no confirmed return date.
Approximately 30,000 individuals are directly employed at these facilities, with an additional 100,000 working within the company’s supply chain.
On Tuesday, the business secretary and industry minister conducted a visit to the West Midlands, their first since the incident, to engage with JLR and companies within its supply chain.
Additional reporting by Pritti Mistry
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