Jaguar Land Rover Faces Disruption Until November After Cyber Hack

Industry sources have warned that Jaguar Land Rover (JLR) could face disruption until November after a serious cyber attack forced the company to shut down its IT networks and paralyze production at its factories. The hack, which occurred more than two weeks ago, has left JLR with no clear date for the resumption of production, despite announcing it would resume on September 24th at the earliest.

JLR has told suppliers that production will not resume until 24th September, but concerns are growing about the impact of the stoppage on the company's extensive supply chain. Industry insiders have warned that even once production lines have restarted, getting back to normal output is likely to take several weeks. Some suppliers, many of whom are small and medium-sized businesses, are facing financial uncertainty and may face bankruptcy without prompt financial support.

The shutdown has been estimated to be costing JLR at least £50m a week in lost production, with the company normally expecting to build over 1,000 cars per day. The firm, which is owned by India's Tata Motors, has car plants in Solihull and Halewood, as well as an engine facility in Wolverhampton. It also has large factories in Slovakia and China, as well as a smaller facility in India.

Announcing the latest delay, JLR said: "We have taken this decision as our forensic investigation of the cyber incident continues and as we consider the different stages of the controlled restart of our global operations, which will take time." The company has admitted some data may have been viewed or stolen by third parties as a result of the cyber attack. By 24th September, three and a half weeks of output will have been lost.

Industry insiders say that even once production lines have restarted, getting back to normal output is likely to take several weeks. Among suppliers, many of whom are small and medium-sized businesses, there is growing concern. Several have told the BBC they simply do not have the financial resources to cope with an extended shutdown and industry experts have said bankruptcies are likely, unless some kind of support is provided.

Jason Richards, West Midlands regional officer at Unite the union, has warned that employers may start discussing potential redundancies. People have to pay rent, they have to pay mortgages, and if they're not getting any pay, what are they supposed to do? "We need to have a supply chain into Jaguar Land Rover," he added. "I cannot emphasize it enough [because] if they turn the tap on and they're expecting the supply chain to be waiting on the subs bench, they won't be there."

Concerns Grow Over Supply Chain Impact

Analysts say that there is a risk of lasting damage to the country's engineering base. Hundreds of thousands of people work in the sector, and industry experts have called for a furlough scheme to be set up, which would use government money to help pay the salaries of people in the sector who are unable to work due to the stoppage.

The Commons Business and Trade Committee has also asked the chancellor what plans she has to support vulnerable businesses in the supply chain. JLR itself is understood to have been holding talks with some suppliers about potential support. While a number of suppliers have expressed concern about a lack of information provided to them by JLR, one leading contractor has defended the company.

"We should not forget who is to blame here," said David Roberts, chair of Evtec Group. "All of this is the fault of criminals. JLR is the victim here. We should remember who started this - and it wasn't JLR."

The Hackers Revealed

A group calling itself Scattered Lapsus$ Hunters has claimed responsibility for the hack. It was also behind a number of high-profile attacks on retailers earlier this year, among them Marks & Spencer and Co-op. The hackers have been identified as a group of cybercrime operatives.