The UK government will provide a £1.5 billion ($2 billion) loan guarantee to support Jaguar Land Rover and its suppliers in recovering from a cyberattack that has shut down production for nearly a month.
The loan guarantee will help suppliers at risk of collapse due to the prolonged shutdown. Several small firms supplying Jaguar Land Rover reported that they had only a week left before running out of funds. The business ministry confirmed that the financing would be privately raised but would be backed by UK Export Finance, the country’s export credit agency.
Business Minister Peter Kyle described the incident as “an assault on an iconic British brand and the wider automotive sector.” He stated that the support package aims to protect skilled jobs and maintain supply chain stability.
Jaguar Land Rover, owned by India’s Tata Motors, operates three UK factories. The facilities in Solihull, Halewood, and Wolverhampton usually produce about 1,000 cars daily. The shutdown, now extended until October 1, has disrupted output and placed pressure on thousands of jobs in Birmingham and Liverpool.
Reports estimate the shutdown costs the company nearly £50 million per week. A recent industry survey found that some suppliers had reduced staff hours, while others had begun redundancies due to falling demand during the suspension of production.
Jaguar Land Rover is also under financial pressure because it lacked cyber insurance at the time of the attack. Early estimates suggest losses could climb above €2 billion, wiping out more than the company's profit for the last financial year.
Shares of Tata Motors fell by almost 5% earlier in the week as news of the cyberattack’s financial impact spread. However, the stock recovered 1.45% on Friday after reports of government support for its British subsidiary.
The loan guarantee will help protect JLR's network of suppliers and avoid a larger-scale crisis in the UK automotive market. The government intervention emphasizes Jaguar Land Rover's role in Britain's economy, especially in sectors where manufacturing is a significant economic activity.
Jaguar Land Rover has confirmed that it will maintain the production suspension until October 1st. The company is currently evaluating the extent of damage caused by the cyberattack as it works to restore operations. The financial aid package will offer crucial support to the company and its supply chain during recovery.
Also Read: Tata Motors Shares Up 0.32% to ₹682.20: Board to Discuss ₹2,000 Cr Fundraising