Jaguar Land Rover Suppliers 'Face Bankruptcy' Due to Hack Crisis

The past two weeks have been disastrous for Jaguar Land Rover (JLR), and the crisis at the car maker shows no signs of coming to an end. A cyber attack, first discovered on September 1st, has forced the manufacturer to shut down its computer systems and close production lines worldwide. The company's factories in Solihull, Halewood, and Wolverhampton are expected to remain idle until at least Wednesday, as JLR continues to assess the damage.

The Human Cost of the Crisis

JLR is thought to have lost at least £50m so far as a result of the stoppage. However, experts say the most serious damage is being done to its network of suppliers, many of whom are small and medium-sized businesses. According to David Bailey, professor of business economics at Birmingham Business School, there are approximately 250,000 people in the supply chain for Jaguar Land Rover. "So if there's a knock-on effect from this closure, we could see companies going under and jobs being lost," he warned.

The Impact on Suppliers

Under normal circumstances, JLR would expect to build over 1,000 vehicles a day, many of them at its UK plants in Solihull and Halewood. Engines are assembled at its Wolverhampton site. The company also has large car factories in China and Slovakia, as well as a smaller facility in India. However, because its production and parts supply systems are heavily automated, this meant cars simply could not be built.

The Government's Response

The government is now facing calls for a furlough scheme to be set up, to prevent widespread job losses. Labour MP Liam Byrne, who chairs the Commons Business and Trade Committee, says that help is needed to mitigate the impact of the crisis on suppliers. "What began in some online systems is now rippling through the supply chain, threatening a cashflow crunch that could turn a short-term shock into long-term harm," he said.

A Potential Solution: Furlough Schemes

The trade union Unite has called for a furlough system to be set up to help automotive suppliers. This would involve the government subsidising workers' pay packets while they are unable to do their jobs, taking the burden off their employers. "Thousands of these workers in JLR's supply chain now find their jobs are under an immediate threat because of the cyber attack," said Unite general secretary, Sharon Graham.

The Future of Jaguar Land Rover Suppliers

Business and Trade Minister Chris Bryant has acknowledged the significant impact of the incident on JLR and its suppliers. He stated that he is in daily contact with the company and their cyber experts to resolve the issue. However, it remains to be seen whether a furlough scheme will be implemented to support the affected suppliers.

Thousands of Jobs at Risk

According to one employee at a major supplier based in the West Midlands, hundreds of staff had been told to remain at home with their hours being "banked" to be offset against holidays or overtime at a later date. There seems little expectation of a swift return to work, and some suppliers have already begun laying off employees, including 40 people at one smaller JLR supplier.

The Role of Temporary Workers

When automotive firms cut back, temporary workers brought in to cover busy periods are usually the first to go. However, if cashflow dries up, permanent staff may have little choice but to be let go due to their skills being difficult to replace.

A Long-Term Impact on the Automotive Industry

The crisis at Jaguar Land Rover highlights the vulnerability of the automotive industry to cyber attacks and supply chain disruptions. The long-term impact on the industry is still uncertain, but one thing is clear: the government needs to act fast to mitigate the effects of this incident and prevent a cornerstone of our advanced manufacturing base from being weakened beyond repair.