The UK government is considering emergency measures to protect supply chain jobs after a cyber attack forced Jaguar Land Rover to halt production worldwide.
Business secretary Peter Kyle is said to be exploring a scheme that would see the government buy parts directly from JLR’s 700 suppliers, and hold on to them until the car maker is able to restart production. The idea is designed to protect suppliers whose livelihoods are directly linked to the company’s output.
JLR, owned by Tata Motors, has been unable to build vehicles since 31st August when the attack hit its IT systems. Earlier this week, the company confirmed that production of all Range Rover, Defender and Discovery models will remain paused until at least 1st October. This also applies to JLR’s factories in Slovakia, Brazil and India, where operations have stopped too.
While the government proposal offers a potential solution for suppliers, it could prove difficult in practice. JLR’s production relies on high-volume parts, and the company has limited spare storage space to hold components purchased under the plan.
The financial cost of the shutdown is already huge. Analysts suggest that if the pause on production goes into November, JLR could lose more than £3.5 billion in revenue and around £1.3 billion in gross profit.
If that wasn’t bad enough, the Financial Times has reported that JLR did not have cyber insurance in place when the attack happened. Apparently, the company had been in discussions with a broker but never actually finalised a policy!
For now, all anyone can do is wait to see whether the government will step in and how quickly JLR can recover from one of the most disruptive cyber attacks for a long time.
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A statement from JLR:
“As part of the controlled, phased restart of our operations, today we have informed colleagues, suppliers and retail partners that sections of our digital estate are now up and running. The foundational work of our recovery programme is firmly underway.
- We have significantly increased IT processing capacity for invoicing. We are now working to clear the backlog of payments to our suppliers as quickly as we can.
- Our Global Parts Logistics Centre, which supplies the parts distribution centres for our retailer partners in the UK and around the world, is now returning to full operations.
- This will enable our retail partners to continue to service our clients’ vehicles and keep our customers mobile.
- 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.
These are important initial steps as our dedicated teams work around the clock alongside cybersecurity specialists, the UK Government’s NCSC and law enforcement to ensure we restart in a safe and secure manner.
Our focus remains on supporting our customers, suppliers, colleagues and our retailers. We fully recognise this is a difficult time for all connected with JLR and we thank everyone for their continued support and patience.”
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