Jaguar Land Rover cyber attack: Government considering support for supply chain firms after disruption


The government is looking at ways to support firms hit by the Jaguar Land Rover (JLR) cyber attack, which has halted production since August.

The car manufacturer announced earlier this week that manufacturing would not resume until October at the earliest. JLRโ€™s workers were told to stay home shortly after the shutdown began, but there has been no firm resolution on how its suppliers would be aided.

Unions have called for a Covid-style furlough operation for those in the supply chain, but the scale and cost of this is not thought to be viable. Businesses are also reportedly unwilling to consider a government-backed loan, given the uncertainty they currently face.

Several other options the government is said to be considering include directly purchasing the parts from suppliers, which JLR would normally buy.

Some firms are thought to have JLR as their only or biggest customer, meaning that while the usual 1,000 or more cars a week are not being produced, their own operations are also shut down.

JLR operates a JIT (just-in-time) model across the manufacturing plants, meaning they do not store huge quantities of parts or have a backlog; instead, they rely on them being produced and delivered as needed based on expected car production times.

News of the support comes after reports that JLR failed to arrange a cyber insurance deal for the company before it was hit by the attack.

That means the company could be forced to foot the bill, running into the tens or hundreds of millions of pounds, for its own lost business and fixing internal systems. And, as a result, some are suggesting that the parent company โ€“ Indian firm Tata Group โ€“ should be on the hook for any losses, as well as potentially supporting its own supply chain.

Its most recent quarterly statement showed JLR having a cash balance of more than ยฃ3bn.

Ministers have said that the only support provided to the supply chain at this stage has come from JLR.

The Business and Trade Minister Peter Kyle met supply chain firms earlier this week and the select committee is set to do the same today. BBC News reports there are questions over whether some of those businesses can โ€œremain viableโ€ without LJRโ€™s production resuming.

Industry minister Chris McDonald said he believed JLR would get through the cyber attack but warned it was a โ€œwake-up callโ€ for other firms.

โ€œWhat I really want this to be is a wake-up call to British industry. I’m affronted by this attack on British industry. This is a serious attack on a flagship of British industry.โ€

Marks & Spencer cited the bill from their own cyber attack at around ยฃ300m, while Co-op said the attack on its operation over the summer cost ยฃ206m. JLR is expected to be losing at least ยฃ50m a week in lost production.

Business Secretary Mr Kyle added on ITV News: โ€œEveryone has to do what they can to support the workforce right the way through the supply chain. JLR is a profitable company, it is backed by a wealthy global company and it is a private sector company. JLR should be…

โ€œAnd is, to my knowledge, doing what it can in a responsible way in this difficult moment. And I have been very clear that they must do all they can, to protect the jobs, not just in JLR, but to think carefully about their responsibility for workers all the way down the supply chain.โ€

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