JLR shutdown extended again as ministers meet suppliers

Jaguar Land Rover (JLR) has confirmed that production in its factories will remain suspended until next month at the earliest.

The business secretary and industry minister are visiting the West Midlands on Tuesday for the first time since the cyber-attack to meet JLR and firms in its supply chain.

The company has been unable to produce cars since the attack at the end of August forced it to shut down its IT networks, and fears are growing that some of its suppliers could go bust without support.

JLR has confirmed that its factories – including its UK facilities in Solihull, Halewood and Wolverhampton – won’t resume operations until at least 1 October.

“Our focus remains on supporting our customers, suppliers, colleagues, and our retailers who remain open,” JLR said in a statement confirming the shutdown extension.

“We fully recognise this is a difficult time for all connected with JLR and we thank everyone for their continued support and patience.”

Sources previously told the BBC the disruption could last into November.

Industry minister Chris McDonald said he was visiting JLR alongside Business Secretary Peter Kyle to “host companies in the supply chain, to listen to workers and hear how we can support them and help get production back online.”

“We are acutely aware of the difficulties the stoppage is causing for those suppliers and their staff, many of whom are already taking a financial hit through no fault of their own.”

The stoppage is thought to be costing JLR itself at least £50m per week. Politicians and union leaders have warned of potentially disastrous consequences for some businesses in the supply chain, especially smaller companies.

Prof David Bailey, a professor of business economics at the University of Birmingham, said “one way or another, the government is going to take a hit” from the shutdown, in the form of either a furlough scheme, loans or an increased welfare bill if staff are laid off.

“If bits of the supply chain go under that’s going to make a restart at JLR much more difficult,” he told BBC Radio WM.

Some of JLR’s suppliers are very small businesses that could “literally run out of money” if the shutdown goes on, he said.

Steve Whitmarsh is the chief executive of Run Your Fleet, a Solihull-based firm which provides breakdown services and corporate car rentals. He told BBC Radio WM that he believed government intervention was “inevitable” as the consequences otherwise would be too severe.

“If we lose that supply chain [we’re] not going to get it back. The impact on the economy and the taxpayer will be far greater than short-term assistance.”

JLR’s three factories in Britain normally produce about 1,000 cars per day.

Antonia Bance, the Labour MP for Tipton and Wednesbury, said there was a risk of “a disintegration of the entire supply chain into JLR”.

“When JLR stands back up again and is ready to go … it may be that some of the supply chain isn’t ready to go, if they’ve lost the skilled labour that they rely on, or maybe some of the businesses have gone under,” she said.

The Liberal Democrats have called on the government to intervene. Helen Morgan, the Lib Dem MP for North Shropshire, said that “the car industry is so important to the West Midlands and indeed to the wider economy”.

JLR’s UK plants employ about 30,000 people directly, with a further 100,000 working in the firm’s supply chain and 60,000 who rely on the spending of these workers.

The company is currently taking the lead on support for its own supply chain, rather than any state intervention.

MPs from across the West Midlands and Merseyside, where JLR has plants, have called for the business secretary to consider loans similar to those offered to businesses during the covid-19 lockdown.

Conservative Saqib Bhatti, whose Meriden and Solihull East constituency is home to a JLR plant, said that “failure” to support the carmaker’s suppliers “could have really significant economic consequences” for the West Midlands.

One of the country’s largest trade unions, Unite, called for a furlough scheme for staff of JLR suppliers, after reporting that some workers were being told to apply for Universal Credit.

Unite said staff were being laid off with “reduced or zero pay” following the hack.