The government could start buying parts from Jaguar Land Rover’s suppliers in a plan to protect manufacturing jobs from the impact of a severe cyber-attack, as it explores options to support companies supplying the stricken carmaker.
The business secretary, Peter Kyle, is considering a plan that would lead to the government buying parts made by the suppliers, then selling them back to JLR when it resumes production of its vehicles, according to a report by ITV News. It is among several options under consideration.
JLR, which is owned by India’s Tata Motors, was hit by a cyber-attack on 31 August, forcing it to freeze production in a shutdown that is expected to drag on into October.
The shutdown has meant that for weeks, Britain’s biggest carmaker has been unable to produce at any of its factories across the UK, Slovakia, Brazil and India, costing it and its suppliers hundreds of millions of pounds.
The shutdown poses an existential threat to JLR’s roughly 700 direct suppliers, who rely on its “just in time” production schedules.
Unions have called for a furlough scheme for workers who are suffering because of the shutdown. While it is understood that ministers are considering various ways the government could provide support, so far they have not formally committed to providing any financial aid to help smaller suppliers survive.
Buying parts is said to be one of several options under consideration. But it would be technically difficult, because the carmaker does not have significant spare warehouse space to store extra parts, which are supplied in huge volumes.
Such a scheme would also be based on the idea that JLR has not suffered a permanent loss of sales due to the shutdown. The scale of any government purchase could be “very significant”, ITV News said.
Both Kyle and the industry minister Chris McDonald met employees from JLR and its suppliers earlier this week.
Kyle said on Tuesday: “Getting JLR back online as soon as possible is my top priority, providing much-needed certainty to workers and suppliers.”
JLR has paid roughly £300m to its partners in recent days, according to a report by Bloomberg. The carmaker is aiming to clear its backlog by the end of the month, prioritising suppliers who are most under pressure, so car production can restart quickly when the time comes.
In the meantime, JLR has posted around 50 employees to roles where they help to process payments manually, as regular systems are down, Bloomberg reported, citing a source close to the matter.
Some suppliers have had to pause their own production and send workers home as a result of the production freeze.
Tata, the multi-billion dollar conglomerate that owns Jaguar Land Rover, has been a big recipient of UK taxpayer funds.
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In 2023, the Conservative government offered £500m in subsidies to support Tata’s construction of a £4bn gigafactory in Somerset, run by its battery business Agratas.
The Indian conglomerate also owns Tata Steel, which was once the UK’s biggest producer of steel from iron ore. It ended primary steelmaking at its site in Port Talbot, south Wales, in September last year, which led to 2,500 job losses. At the time, Jonathan Reynolds, then business secretary, agreed a deal in which the government would provide £500m towards the construction of a new, greener, electric arc furnace at the site.
The disruption at JLR comes as it faces falling profits amid the impact of US tariffs and declining sales. The carmaker reported that underlying pre-tax profits dropped 49% to £351m in the three months to June, including when the company temporarily paused exports to the US.
The company also faced criticism last year over its rebrand of Jaguar, and its new electric cars are not expected to launch until next year.
The carmaker, which is headquartered in Coventry, employs 32,800 people in the UK across 17 different sites. Last month it announced that PB Balaji would become its new chief executive and would take the reins in November.
Balaji, who is group finance chief of Tata Motors, will replace Adrian Mardell, who is retiring after three years in the top job and 35 years working for the company.
JLR was approached for comment.
