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In response to ongoing production disruptions stemming from a recent cyber attack, the government is set to underwrite a £1.5 billion loan guarantee for Jaguar Land Rover (JLR) to support its extensive supply chain.
Business Secretary Peter Kyle stated that the loan, facilitated through a commercial bank, aims to safeguard jobs across the West Midlands, Merseyside, and the broader United Kingdom.
The automotive manufacturer has been compelled to halt production for several weeks following a targeted cyber attack that occurred in late August.
Mounting concerns have arisen regarding the potential for bankruptcies among JLR’s suppliers, many of which are small businesses, due to the prolonged shutdown. JLR operates the largest supply chain within the UK automotive sector, supporting approximately 150,000 jobs.
The loan is intended to provide suppliers with increased financial stability as the production standstill continues.
The government’s underwriting of the loan will be executed through the Export Development Guarantee (EDG), a mechanism designed to assist UK companies engaged in international trade.
JLR will repay the loan over a five-year period, bolstering the company’s cash reserves as it addresses a “backlog of payments” to its suppliers.
Production has ceased entirely this month, and JLR has suspended orders with its network of 700 suppliers.
A parliamentary committee reported that certain small suppliers indicated they possessed cash reserves sufficient for only approximately one week.
The operational disruption is estimated to be costing JLR at least £50 million weekly.
The manufacturer, a subsidiary of India’s Tata Motors, typically produces around 1,000 vehicles per day across its facilities in Solihull, Wolverhampton (West Midlands), and Halewood (Merseyside).
Secretary Kyle remarked, “Following our decisive action, this loan guarantee will help support the supply chain and protect skilled jobs in the West Midlands, Merseyside and throughout the UK.”
Chancellor Rachel Reeves commented, “Today we are protecting thousands of those jobs with up to £1.5bn in additional private finance, helping them support their supply chain and protect a vital part of the British car industry.”
Shadow business secretary Andrew Griffith acknowledged the government’s intervention but noted the “delay” in its implementation, advocating for the establishment of a cyber reinsurance scheme to shield British businesses from state-sponsored cyber threats.
Liberal Democrat business spokesperson Sarah Olney also welcomed the support, while criticizing the government’s “slow” response, and suggested the potential need for a furlough scheme to assist affected workers.
Union Unite, representing numerous employees at JLR and within its supply chain, characterized the government’s support as a significant “first step.”
General Secretary Sharon Graham stated, “The money provided must now be used to ensure job guarantees and to also protect skills and pay in JLR and its supply chain.”
JLR experienced the cyber attack on August 31. A group identifying itself as Scattered Lapsus$ Hunters has claimed responsibility for the breach.
The group has also been linked to a series of high-profile cyber attacks targeting retailers earlier this year, including Marks & Spencer and Co-op.
JLR employees have been instructed to remain at home since September 1, with no confirmed return date announced.
Approximately 30,000 individuals are directly employed at the company’s manufacturing facilities.
A JLR spokesperson stated: “Our teams continue to work around the clock alongside cybersecurity specialists, the NCSC and law enforcement to ensure we restart in a safe and secure manner.
“The foundational work of our recovery programme is firmly underway, and we will continue to provide regular updates to our colleagues, retailers and suppliers.”
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