“`html
Jaguar Land Rover (JLR) has faced a challenging two weeks, with a crisis unfolding that shows no immediate signs of resolution.
The cyber attack, initially reported on September 1st, compelled the manufacturer to shut down its computer systems and halt production across its global operations.
Production at JLR’s Solihull, Halewood, and Wolverhampton facilities is anticipated to remain suspended until at least Wednesday as the company continues its assessment of the incident’s impact.
Estimates suggest that JLR has already incurred losses of at least £50 million as a result of the production stoppage. However, industry experts suggest the most significant repercussions are being felt by its network of suppliers, many of whom are small and medium-sized enterprises.
Concerns are mounting, and calls for a government-backed furlough scheme are growing, aimed at mitigating potential widespread job losses.
David Bailey, Professor of Business Economics at Aston University, noted to the BBC: “Jaguar Land Rover’s supply chain encompasses up to a quarter of a million individuals.”
“The knock-on effects from this closure could lead to business failures and subsequent job losses.”
Under normal operating conditions, JLR produces over 1,000 vehicles daily, a significant portion of which originates from its UK plants in Solihull and Halewood. Engine assembly takes place at the Wolverhampton site. The company also operates substantial manufacturing facilities in China and Slovakia, along with a smaller plant in India.
JLR stated that the IT network shutdown was a deliberate measure to protect systems from further compromise. However, the high degree of automation in production and parts supply systems meant that vehicle manufacturing was rendered impossible.
Sales operations have also experienced substantial disruption, though alternative solutions have been implemented to maintain dealership functionality.
Initially, the carmaker conveyed confidence in a swift resolution to the issue.
Nearly two weeks later, it is evident that the restoration of computer systems has proven to be a complex and protracted process. JLR has acknowledged the possibility of data being accessed or stolen and is collaborating with the National Cyber Security Centre to investigate the incident.
Experts estimate the daily cost to JLR to be between £5 million and £10 million, potentially resulting in losses of £50 million to £100 million thus far. However, given the company’s pre-tax profit of £2.5 billion in the year ending in March, it possesses the financial capacity to withstand a crisis spanning weeks rather than months.
JLR is positioned at the apex of a supply chain network, with numerous suppliers heavily reliant on the carmaker as their primary customer.
This network includes a significant number of small and medium-sized businesses that lack the resources to effectively manage a prolonged disruption to their operations.
“Bankruptcies are a real possibility. I wouldn’t be at all surprised to see them,” stated Andy Palmer, former senior executive at Nissan and former CEO of Aston Martin.
He believes suppliers have already initiated significant headcount reductions to mitigate costs.
Mr. Palmer explained: “In the initial week of a shutdown, losses are absorbed. However, as the second week progresses and more information becomes available, decisive cuts are implemented. Layoffs are either already in progress or under active consideration.”
An executive at a smaller JLR supplier, who requested anonymity, confirmed that their firm had already laid off 40 employees, representing nearly half of its workforce.
Simultaneously, other companies are directing employees to remain at home, with non-worked hours being “banked” for offset against future holidays or overtime.
Expectations for a swift return to operations appear limited.
An employee at a major supplier in the West Midlands indicated to the BBC that a return to the shop floor is not anticipated until September 29th, with hundreds of staff instructed to remain at home.
In situations where automotive firms implement cutbacks, temporary workers brought in to manage peak periods are typically the first to be affected.
There is generally reluctance to eliminate permanent staff, owing to their specialized skills that are difficult to replace. However, a depletion of cash flow may leave companies with limited alternatives.
Labour MP Liam Byrne, chair of the Commons Business and Trade Committee, emphasized the necessity of government assistance.
“An event that began with online systems is now cascading through the supply chain, posing a threat of a cash flow crisis that could transform a short-term disruption into long-term damage,” he stated.
“We cannot allow a key component of our advanced manufacturing base to be weakened by events beyond its control.”
The trade union Unite has advocated for the implementation of a furlough system to support automotive suppliers. This approach would involve the government subsidizing workers’ wages while they are unable to perform their duties, thereby alleviating the financial burden on employers.
“Thousands of workers in JLR’s supply chain are now facing immediate threats to their jobs due to the cyber attack,” said Unite General Secretary, Sharon Graham.
“Ministers must act swiftly and introduce a furlough scheme to safeguard crucial jobs and skills while JLR and its supply chain regain stability.”
Business and Trade Minister Chris Bryant stated: “We recognize the significant impact this incident has had on JLR and their suppliers, and I know this is a worrying time for those affected.”
“I met with the chief executive of JLR yesterday to discuss the impact of the incident. We are also in daily contact with the company and our cyber experts about resolving this issue.”
Anne Shaw’s departure was announced by West Midlands Mayor Richard Parker on Friday.
The plaque is unveiled by Wolverhampton’s mayor at a ceremony on Friday.
One resident, 92, says he was unable to access his drive.
Residents are being asked to increase their awareness in aid of Male Cancer Awareness Week.
The NHS vaccination programmes started earlier this month and Wolverhampton resident are urged to get protected.
“`