Jaguar Land Rover suppliers ‘face bankruptcy’ due to hack crisi
But experts say the most serious damage is being done to its network of suppliers, many of whom are small and medium sized businesses.
The government is now facing calls for a furlough scheme to be set up, to prevent widespread job losses.
David Bailey, professor of business economics at Aston University, told the BBC: “Theres anywhere up to a quarter of a million people in the supply chain for Jaguar Land Rover.
“So if theres a knock-on effect from this closure, we could see companies going under and jobs being lost”.
Under normal circumstances, JLR would expect to build more than 1,000 vehicles a day, many of them at its UK plants in Solihull and Halewood. However, because its production and parts supply systems are heavily automated, this meant cars simply could not be built.
Sales were also heavily disrupted, though workarounds have since been put in place to allow dealerships to operate.
Initially, the carmaker seemed relatively confident the issue could be resolved quickly.
Nearly two weeks on, it has become abundantly clear that restarting its computer systems has been a far from simple process. I would not be at all surprised to see bankruptcies,” says Andy Palmer, a one-time senior executive at Nissan and former boss of Aston Martin.
He believes suppliers will have begun cutting their headcount dramatically in order to keep costs down.
Mr Palmer says: “You hold back in the first week or so of a shutdown. But if cashflow dries up, they may have little choice.
Labour MP Liam Byrne, who chairs the Commons Business and Trade Committee, says this means government help is needed.
“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 says.
“We cannot afford to see a cornerstone of our advanced manufacturing base weakened by events beyond its control”.
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 JLRs supply chain now find their jobs are under an immediate threat because of the cyber attack,” says Unite general secretary, Sharon Graham.
“Ministers need to act fast and introduce a furlough scheme to ensure that vital jobs and skills are not lost while JLR and its supply chain get back on track. We are also in daily contact with the company and our cyber experts about resolving this issue.
