Jaguar Land Rover has said it will restart parts of its manufacturing operations “in the coming days” in the latest stage of its complex effort to recover from a crippling cyber-attack.
The maker of Jaguar and Land Rover cars has been scrambling to get its systems up and running after the hack on the last day of August forced it to shut down factories and retail operations around the world.
Britain’s biggest automotive employer said it was carrying out a “controlled, phased restart of our operations”, in a statement on Monday.
The UK government announced a £1.5bn loan guarantee for JLR on Saturday “to support its supply chain”. JLR has also separately agreed another £2bn debt deal with Britain’s Standard Chartered Bank, America’s Citigroup and Japan’s Mitsubishi UFJ Financial Group. JLR declined to comment on the debt agreement, which was first reported by the Economic Times.
Peter Kyle, the business secretary, said the government had announced “a huge amount of money to help a hugely important company” and “countless businesses in the supply chain that are being affected”, in a speech on Monday at Labour’s annual conference in Liverpool.
However, the actual loan will be provided by private-sector banks, with a guarantee from the government’s export credit agency, UK Export Finance, that it would bear any losses if JLR failed to repay it.
The two loans will help to ease the pressure on JLR’s cash reserves as it bears the heavy costs of investigating the hack as well as rebuilding its systems. However, credit analysts have said the company, which is owned by the Indian conglomerate Tata, is unlikely to default on its debts after almost two years of large profits.
The company’s engine factory in Wolverhampton, West Midlands, is likely to be the first to restart, according to two people with knowledge of the situation.
The prospect of a limited manufacturing restart will be welcomed by suppliers, many of whom have had to contend with nearly a month without sales to their key customer.
However, it is unclear how quickly money will be disbursed to the broader supply chain, with smaller manufacturers across the country having laid off workers as soon as the extent of the hack became clear.
One large supplier expressed frustration with the government’s decision to help JLR rather than the supply chain. The loan guarantee “does not necessarily get money and liquidity into the supply chain”, the source said. A group of suppliers last week told ministers that a loan scheme would not work.
after newsletter promotion
“If your balance sheet is fragile from the last four years, what reasonable board is going to take on more debt to fund losses?” the supplier asked, referring to the successive crises that followed the coronavirus pandemic, including a slowdown in global demand and Donald Trump’s car industry tariffs.
JLR has 33,000 workers, and is second only to Nissan in terms of the number of cars produced in the UK. JLR’s luxury models, led by the £120,000 Range Rover, make it a key source of work for much of the West Midlands automotive industry.
JLR said: “We continue to work around the clock alongside cybersecurity specialists, the UK government’s National Cyber Security Centre and law enforcement to ensure our restart is done in a safe and secure manner.
“We would like to thank everyone connected with JLR for their continued patience, understanding and support. We know there is much more to do but the foundational work of our recovery is firmly under way, and we will continue to provide updates as we progress.”
