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The UK government has stepped in to provide a £1.5bn loan guarantee to Jaguar Land Rover (JLR) in an effort to assist its suppliers during a cyber attack that has brought production to a standstill. Business Secretary Peter Kyle emphasized that the loan, sourced from a commercial bank, aims to safeguard jobs not only in the West Midlands and Merseyside but also across the entire country. JLR has endured a production shutdown for several weeks following a cyber attack at the end of August.
Concerns have been mounting regarding the potential collapse of some suppliers, particularly smaller businesses, due to the extended shutdown. With around 150,000 individuals employed in JLR’s extensive supply chain, the government hopes that the loan will provide some stability as the manufacturing hiatus continues. Through the Export Development Guarantee (EDG), the government will back the loan, which JLR is expected to repay over a five-year period to bolster the company’s financial reserves and settle outstanding payments to its suppliers.
As production remains at a standstill this month, JLR has halted orders with its 700 suppliers, creating significant financial strains. Some small suppliers revealed to a parliamentary committee that they are on the brink of running out of cash within a week. The production disruption is estimated to cost JLR at least £50m per week, emphasizing the urgency of the situation. Typically, JLR constructs about 1,000 vehicles daily across its factories located in Solihull, Wolverhampton, and Halewood.
Following the government’s decisive intervention, Business Secretary Kyle expressed confidence that the loan guarantee would help shore up the supply chain and protect jobs throughout the UK. Chancellor Rachel Reeves echoed these sentiments, highlighting the safeguarding of numerous jobs through the injection of up to £1.5bn in additional private financing. While the government’s support was welcomed by Shadow business secretary Andrew Griffith and Liberal Democrat business spokesperson Sarah Olney, they stressed the need for quicker action and readiness to implement additional measures if necessary to safeguard affected workers. Union Unite, representing employees at JLR and within the supply chain, viewed the government’s aid as a positive initial step towards preserving jobs and maintaining skills within the industry
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