The government may step in to support Jaguar Land Rover’s suppliers as the effects of the recent cyber-attack on the firm are felt across the automotive sector.
About 30,000 people are directly employed at the company’s plants with about 100,000 working for firms in the supply chain. Some of these firms supply exclusively to JLR, while others sell parts to other carmakers as well.
There are fears that some suppliers, in particular the smaller firms who solely rely on JLR’s business, could go under.
One possibility is for the government to buy the component parts the suppliers build, to keep them in business until JLR’s production lines are up and running again.
Unions have called for a Covid-style furlough scheme, but ministers have ruled this out given its likely cost, sources have told the BBC.
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JLR, which is owned by India’s Tata Motors, would normally expect to build about 1,000 cars a day at its three factories in Solihull and Wolverhampton in West Midlands, and Halewood in Merseyside.
JLR confirmed this week that its factories will not resume operations until at least 1 October, with earlier reports suggesting the disruption could last into November.
Speaking to BBC Radio 4’s Today programme, former Conservative mayor of the West Midlands, Andy Street, said the companies in JLR’s supply chain had been very successful and he supported offering them government-backed loans.
“I would argue if you think of the total income that JLR and its supply chain put into the Exchequer, this is a good deal for the Exchequer,” he said.
On Tuesday, the business secretary Peter Kyle and industry minister Chris McDonald visited the West Midlands for the first time since the incident to meet JLR and the firms in its supply chain.
During the visit to JLR’s roof supplier, Webasto, in Sutton Coldfield, McDonald said it was “really important that we don’t impose solutions on businesses but that we work with them”.
The Department for Business and Trade said ministers had discussed “the impacts of the cyber-incident and how JLR can work towards restarting production”.
The firm also has large factories in Slovakia and China, as well as a smaller facility in India, which have also been affected by the shutdown.
A group calling itself Scattered Lapsus$ Hunters has claimed responsibility for the hack on JLR, Marks & Spencer, and Co-op.
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