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Jaguar Land Rover (JLR) has announced the commencement of a “phased restart” of its operations, reporting that portions of its IT infrastructure are now operational.
The company stated it is actively “working to clear a backlog of payments” to its suppliers, citing increased processing capacity for invoicing.
Production lines at the car manufacturer have been suspended since a cyber-attack in August compelled the shutdown of its IT networks. Factories are expected to remain closed until at least next month.
The prime minister has affirmed that the government is “working 24/7” on a support package for suppliers amid growing concerns that some, primarily smaller businesses, may face insolvency due to the prolonged operational standstill.
Sir Keir Starmer described the situation confronting suppliers as “urgent,” while acknowledging that a support plan has not yet been finalized.
“I am acutely aware of the urgency of the situation and the difficulties that many of these companies are inevitably finding themselves in, through no fault of course of their own,” he told the BBC.
Various proposals have been suggested regarding potential government intervention to support JLR’s suppliers until vehicle production resumes.
The company stated on Thursday that its recovery program is “firmly under way” and that its global parts logistics center, which provides spare parts to service customer vehicles, is “returning to full operations.”
“The financial system we use to process the wholesales of vehicles has been brought back online, and we are able to sell and register vehicles for our clients faster, delivering important cash flow,” the company added.
The carmaker acknowledged that the situation represents a “difficult time for all connected with JLR,” with no new cars being built and staff being temporarily laid off.
The manufacturer, owned by India’s Tata Motors, typically produces approximately 1,000 vehicles daily across its three facilities in Solihull and Wolverhampton in the West Midlands, and Halewood in Merseyside.
Workers have been instructed to remain at home since September 1, with no definitive return date established.
Approximately 30,000 individuals are directly employed at the company’s plants, with an estimated 100,000 working for firms within the supply chain. Some of these firms exclusively supply parts to JLR, while others provide components to other car manufacturers.
Calls have been made to provide support to suppliers, whose businesses are under threat due to the cascading effects of the cyber-attack.
One potential solution being explored involves the government purchasing component parts manufactured by suppliers, with the objective of ensuring the viability of companies within JLR’s supply chain until production lines are restored.
However, firms have expressed skepticism to the BBC regarding the potential success of such a scheme.
The government “simply don’t understand the complexity of what they’re dealing with,” one supplier stated.
“We don’t need promises, we need help.”
The prime minister indicated that the business secretary, Peter Kyle, is “working 24/7 with those businesses to come up with a viable way of solving this and supporting them in this crucial period.”
Industry Minister Chris McDonald stated that the move towards restarting production represented “welcome progress towards JLR’s recovery” and a step in supporting cash flow across JLR’s supply chains, adding that the government would continue its dialogue with the beleaguered firm.
Unions have advocated for a Covid-style furlough scheme, but ministers have reportedly ruled this out due to its likely cost, according to BBC sources.
While government purchase and stockpiling of car parts remains a potential option, this would present significant logistical challenges.
JLR’s manufacturing process relies on the precise delivery of the correct part to the correct location at the correct time.
Another option under consideration involves government-backed loans to suppliers, although this is understood to be unpopular with the affected businesses.
Accident repairs specialist Ashley Bernstein says it is increasingly hard to source common parts.
A former engineer speaks to the BBC as the car maker extends its shutdown following a cyber attack.
Knowsley Council leader Graham Morgan is urging the government to help those affected by the incident.
The business secretary will also meet suppliers of the car maker who are at risk of closure.
Parents of a worker from Solihull say he has just moved house as the firm extends a production pause.
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