Jaguar Land Rover (JLR) has confirmed that production in its factories will remain suspended until next month at the earliest.
The business secretary and industry minister are visiting JLR on Tuesday for the first time since the cyber-attack to meet with the company and firms in the beleaguered carmaker’s supply chain.
The company has been unable to produce cars since the attack at the end of August forced it to shut down its IT networks, and fears are growing that the company’s suppliers could go bust without support.
JLR has confirmed that its factories – including its UK facilities in Solihull, Halewood and Wolverhampton – won’t resume operations until at least 1 October.
“Our focus remains on supporting our customers, suppliers, colleagues, and our retailers who remain open,” JLR said in a statement confirming the shutdown extension.
“We fully recognise this is a difficult time for all connected with JLR and we thank everyone for their continued support and patience.”
Sources previously told the BBC the disruption could last into November.
Industry minister Chris McDonald said he was visiting JLR alongside Business Secretary Peter Kyle to “host companies in the supply chain, to listen to workers and hear how we can support them and help get production back online.”
He said in a statement: “We have two priorities, helping Jaguar Land Rover get back up and running as soon as possible and the long-term health of the supply chain.
“We are acutely aware of the difficulties the stoppage is causing for those suppliers and their staff, many of whom are already taking a financial hit through no fault of their own – and we will do everything we can to reassure them that the government is on their side.”
‘Cry for help’
The stoppage is thought to be costing JLR itself at least £50m per week. Politicians and union leaders have warned of potentially disastrous consequences for some businesses in the supply chain, especially smaller companies.
Suppliers are anxious to be heard, according to Johnathan Dudley, the head of manufacturing for accounting and consulting firm Crowe UK. The firm is based in the West Midlands, which is where the Solihull and Wolverhampton plants are.
“Obviously, they’re being very, very cautious because they don’t want to create panic, and equally, they don’t want to be seen to be criticising people further up the chain,” he told BBC Radio 4’s Today programme.
“It’s not a blame game, but it is a cry for help, because there are businesses now seeing people not paying [staff].”
Prof David Bailey, a professor of business economics at the University of Birmingham, said “one way or another, the government is going to take a hit” from the shutdown, in the form of either a furlough scheme, loans or an increased welfare bill if staff are laid off.
“If bits of the supply chain go under that’s going to make a restart at JLR much more difficult,” he told BBC Radio WM.
Some of JLR’s suppliers are very small businesses that could “literally run out of money” if the shutdown goes on, he said.
Steve Whitmarsh is the chief executive of Run Your Fleet, a Solihull-based firm which provides breakdown services and corporate car rentals. He told BBC Radio WM that he believed government intervention was “inevitable” as the consequences otherwise would be too severe.
“If we lose that supply chain [we’re] not going to get it back. The impact on the economy and the taxpayer will be far greater than short-term assistance.”
JLR’s UK plants employ about 30,000 people directly, with a further 100,000 working in the firm’s supply chain and 60,000 who rely on the spending of these workers.
The company is currently taking the lead on support for its own supply chain, rather than any state intervention.
MPs from across the West Midlands and Merseyside, where JLR has plants, have called for the business secretary to consider loans similar to those offered to businesses during the covid-19 lockdown.
One of the country’s largest trade unions, Unite, called for a furlough scheme for staff of JLR suppliers, after reporting that some workers were being told to apply for Universal Credit.
Unite said staff were being laid off with “reduced or zero pay” following the hack.
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