Michael RaceBusiness reporter, News
Jaguar Land Rover (JLR) says it has begun a “phased restart” of its operations with parts of its IT system back up and running.
The company said it was “working to clear a backlog of payments” to suppliers as it now had increased its processing capacity for invoicing.
The carmaker’s production lines have been suspended since a cyber attack in August forced the company to shut down its IT networks. Its factories remain closed until next month at the earliest.
The government is considering stepping in to support JLR’s parts suppliers, with concerns growing that some, mostly small businesses, could go bust due to the prolonged shutdown of operations.
JLR said on Thursday that its recovery programme was “firmly under way” and that its global parts logistics centre, which supplies spare parts that service customers’ vehicles, “returning to full operations”.
“The financial system we use to process the wholesales of vehicles has been brought back online and we are able to sell and register vehicles for our clients faster, delivering important cash flow,” the company added.
The carmaker said it recognised that the situation was a “difficult time for all connected with JLR”, with no new cars being built and staff being sent home from work.
The manufacturer, which is owned by India’s Tata Motors, typically builds about 1,000 cars a day at its three factories in Solihull and Wolverhampton in West Midlands, and Halewood in Merseyside.
Workers have been told to stay home since 1 September, with no firm return date.
About 30,000 people are directly employed at the company’s plants with about 100,000 working for firms in the supply chain. Some of these firms supply parts exclusively to JLR, while others sell components to other carmakers as well.
Calls have been made to support suppliers, whose businesses are under threat as a result of the knock-on impact of the cyber attack.
One idea being explored is the government buying the component parts the suppliers build, with the aim of keeping the companies in JLR’s supply chain in business until production lines are up and running again.
However, firms have told the they are sceptical about the success of such a scheme.
The government “simply don’t understand the complexity of what they’re dealing with”, said one supplier.
“We don’t need promises, we need help.”
Unions have called for a Covid-style furlough scheme, but ministers have ruled this out given its likely cost, sources have told the .
While the purchase and stockpiling of car parts by the government is an option on the table, this would present considerable logistical challenges.
JLR’s manufacturing process relies on the right part arriving at the right place, at the right time.
Another option being considered is government-backed loans to suppliers, though this is understood to be unpopular with suppliers.
