LONDON (Reuters) -Britain’s government is considering throwing a financial lifeline to carmaker Jaguar Land Rover’s suppliers after a shutdown caused by a cyberattack was extended until October, a government source said on Thursday.
The luxury carmaker owned by India’s Tata Motors has three factories in Britain which together produce about 1,000 cars per day. The company is losing at least 50 million pounds ($68 million) a week, according to the BBC, with many of its 33,000 staff told to stay at home.
Business minister Peter Kyle and industry minister Chris McDonald visited JLR on Tuesday and talked to the CEO about how the company can work towards restarting production.
“We have two priorities – helping Jaguar Land Rover get back up and running as soon as possible, and the long-term health of the supply chain,” said McDonald.
“The government is looking at several ways to provide support to JLR suppliers,” the source said.
GOVERNMENT COULD BUY COMPONENTS
Schemes under consideration included the government buying component parts from the suppliers to enable them to survive until JLR resumes production, according to a BBC report.
Another option was providing government-backed loans to suppliers, the BBC said, although it added that the idea was not popular with suppliers.
When asked about the government stepping in, the business department pointed to a statement on Tuesday in which Kyle said “we are doing everything we can to minimise the impact of this incident.”
JLR WORKING TO PRIORITISE SUPPLIER PAYMENTS
The British parliament’s Business and Trade Select Committee will hear from companies in JLR’s supply chain on Thursday.
Tata Motors finance chief P B Balaji told the committee’s chair Liam Byrne in a letter dated on Tuesday that JLR was working with its supply partners to prioritise payments to “those with the greatest need,” adding that JLR intended to settle any outstanding payments “in the coming weeks”.
He said JLR was “fully empowered to take decisions that best reflect the interests of its business and commercial partners,” in the letter, which was published by the committee.
“As part of TML and the Tata Group, JLR benefits from faster, preferential access to competitive credit rates through its global banking relationships,” he said.
“We are engaged across multiple stakeholders to find solutions to support JLR’s commercial partners and hope to find a practical workable solution at the earliest.”
Mike Hawes, the head of Britain’s automotive trade body SMMT, said the cyberattack’s impact on the supply chain and wider industry on which it depends was “severe and of indeterminate duration”.
He said in an emailed statement that SMMT was working with JLR, the government and suppliers to identify what additional supportive measures might be needed.
(Reporting by Paul Sandle, Muvija M and Elizabeth Piper; Editing by Mark Potter and Hugh Lawson)
