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Government to guarantee £1.5bn Jaguar Land Rover loan after cyber shutdown Government to guarantee £1.5bn Jaguar Land Rover loan after cyber shutdown
(about 1 hour later)
The government will underwrite a £1.5bn loan guarantee to Jaguar Land Rover (JLR) in a bid to support its suppliers as a cyber attack continues to halt production at the car maker. The government will underwrite a £1.5bn loan guarantee to Jaguar Land Rover (JLR) in a bid to support its suppliers as a cyber-attack continues to halt production at the car maker.
Business Secretary Peter Kyle said the loan, from a commercial bank, would protect jobs in the West Midlands, Merseyside and across the UK.Business Secretary Peter Kyle said the loan, from a commercial bank, would protect jobs in the West Midlands, Merseyside and across the UK.
The manufacturer has been forced to suspend production for weeks after being targeted by hackers at the end of August.The manufacturer has been forced to suspend production for weeks after being targeted by hackers at the end of August.
There have been growing concerns some suppliers, mostly small businesses, could go bust due to the prolonged shutdown. The company operates the largest supply chain in the UK automotive sector, employing around 150,000 people. There have been growing concerns some suppliers, mostly small businesses, could go bust due to the prolonged shutdown.
It is hoped the loan will give suppliers some certainty as the shutdown continues. About 30,000 people are directly employed at the company's UK 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.
It is believed to be the first time that a company has received government help as a result of a cyber-attack.
It is hoped the loan will give suppliers some certainty as the shutdown continues, with production not expected to resume at JLR's UK facilities until 1 October at the earliest.
The government will underwrite the loan through the Export Development Guarantee (EDG), a financial support mechanism aimed at helping UK companies who sell overseas.The government will underwrite the loan through the Export Development Guarantee (EDG), a financial support mechanism aimed at helping UK companies who sell overseas.
The loan will be paid back by JLR over five years, in an effort to boost the firm's cash reserves as it makes a "backlog of payments" to its suppliers.The loan will be paid back by JLR over five years, in an effort to boost the firm's cash reserves as it makes a "backlog of payments" to its suppliers.
No cars have been built this month, and the company has stopped placing orders with its 700 suppliers.No cars have been built this month, and the company has stopped placing orders with its 700 suppliers.
A parliamentary committee said some small suppliers had told them they had, at most, one week left before they ran out of cash.A parliamentary committee said some small suppliers had told them they had, at most, one week left before they ran out of cash.
The halt in operations is thought to be costing JLR itself at least £50m per week.The halt in operations is thought to be costing JLR itself at least £50m per week.
The manufacturer, owned by India's Tata Motors, typically builds about 1,000 cars a day at its three factories in Solihull and Wolverhampton in the West Midlands, and Halewood in Merseyside.The manufacturer, owned by India's Tata Motors, typically builds about 1,000 cars a day at its three factories in Solihull and Wolverhampton in the West Midlands, and Halewood in Merseyside.
JLR restarts some IT systems after cyber-attackJLR restarts some IT systems after cyber-attack
JLR suppliers with 'days of cash' leftJLR suppliers with 'days of cash' left
Kyle said: "Following our decisive action, this loan guarantee will help support the supply chain and protect skilled jobs in the West Midlands, Merseyside and throughout the UK."Kyle said: "Following our decisive action, this loan guarantee will help support the supply chain and protect skilled jobs in the West Midlands, Merseyside and throughout the UK."
Chancellor Rachel Reeves said: "Today we are protecting thousands of those jobs with up to £1.5bn in additional private finance, helping them support their supply chain and protect a vital part of the British car industry."Chancellor Rachel Reeves said: "Today we are protecting thousands of those jobs with up to £1.5bn in additional private finance, helping them support their supply chain and protect a vital part of the British car industry."
Shadow business secretary Andrew Griffith welcomed the government's support but said it "took too long to get there" and called on Labour to form a cyber reinsurance scheme to protect British businesses from state-backed actors.Shadow business secretary Andrew Griffith welcomed the government's support but said it "took too long to get there" and called on Labour to form a cyber reinsurance scheme to protect British businesses from state-backed actors.
Liberal Democrat business spokesperson Sarah Olney also praised the move but said the government had been "too slow to act", adding it should also be prepared to provide a furlough scheme for affected workers if required.Liberal Democrat business spokesperson Sarah Olney also praised the move but said the government had been "too slow to act", adding it should also be prepared to provide a furlough scheme for affected workers if required.
Union Unite, representing thousands at JLR and in the supply chain, described the government support as an "important first step".Union Unite, representing thousands at JLR and in the supply chain, described the government support as an "important first step".
"The money provided must now be used to ensure job guarantees and to also protect skills and pay in JLR and its supply chain," said general secretary Sharon Graham."The money provided must now be used to ensure job guarantees and to also protect skills and pay in JLR and its supply chain," said general secretary Sharon Graham.
JLR was hit by a cyber-attack on 31 August. A group calling itself Scattered Lapsus$ Hunters has claimed responsibility for the hack.JLR was hit by a cyber-attack on 31 August. A group calling itself Scattered Lapsus$ Hunters has claimed responsibility for the hack.
It was also behind a number of high-profile attacks on retailers earlier this year, including Marks & Spencer and Co-op.It was also behind a number of high-profile attacks on retailers earlier this year, including Marks & Spencer and Co-op.
JLR workers have been told to stay home since 1 September, with no firm return date provided.JLR workers have been told to stay home since 1 September, with no firm return date provided.
About 30,000 people are directly employed at the company's plants.
A JLR spokesperson said: "Our teams continue to work around the clock alongside cybersecurity specialists, the NCSC and law enforcement to ensure we restart in a safe and secure manner.A JLR spokesperson said: "Our teams continue to work around the clock alongside cybersecurity specialists, the NCSC and law enforcement to ensure we restart in a safe and secure manner.
"The foundational work of our recovery programme is firmly under way, and we will continue to provide regular updates to our colleagues, retailers and suppliers.""The foundational work of our recovery programme is firmly under way, and we will continue to provide regular updates to our colleagues, retailers and suppliers."