Jaguar Land Rover scrambles to pay suppliers as cyberattack crisis deepens

Jaguar Land Rover (JLR) is racing to pay its suppliers hundreds of millions of pounds as a debilitating cyberattack extends its factory shutdown into a fourth week, threatening the survival of smaller firms in its supply chain.

The biggest car manufacturer in the UK has shut down its production at Solihull, Halewood, and Wolverhampton facilities since the beginning of September, which means the company has to stop its operations and completely disable its IT systems and payment processing facilities.

The company has since assured that factories will only resume its operation after October, 1.

The sources indicate that over the past few days, JLR has been paying suppliers around £300 million to clear a backlog and prevent a breakdown in its supply base.

The crisis demonstrates the weakness of the just-in-time manufacturing model in the automotive industry which is based on a complex network of frequently small and specialised companies.

A long-term JLR employee and experienced engineer told the BBC that, although the disruption was tolerable by the large, so-called tier one, or the larger, tier three or four, firms that manufactured small parts, vital to the company, were under threat.

There is a risk that any single minor supplier failure will result in significant delays and quality issues once production resumes.

The government has intervened on Tuesday, September 23, with Business Secretary Peter Kyle and Industry Minister Chris McDonald holding a meeting with JLR executives.

According to McDonald, it has two priorities, i.e., to get Jaguar Land Rover back up and running within the shortest time possible and to ensure the long-term health of the supply chain.

It is estimated that the incident, the latest in a series of high-profile ransomware attacks on European airports, is costing JLR approximately £50 million a week and highlights the emerging danger of cyberattacks to the world industry and economy.