The UK government will guarantee a £1.5 billion loan to JLR to help it support suppliers who have been hit by the production shutdown sparked by a cyber attack.
The loan to the Tata-owned car firm will be issued by a commercial bank, but will be underwritten by the UK government.
JLR halted production at all of its factories worldwide when it was targets by hackers on 1 September and has yet to start making cars again. As well as costing JLR an estimated £50 million a week, it has badly hit the firm's suppliers.
It is estimated that around 150,000 people are employed by some 700 British firms that supply JLR, and the UK government has been investigating ways to support them, such as a furlough scheme or loans to suppliers.
It will instead underwrite a single loan to JLR through the Export Development Guarantee (EDG), with JLR repaying the money over a period of five years.
Business Secretary Peter Kyle said that the loan guarantee "will help support the supply chain and protect skilled jobs in the West Midlands, Merseyside and throughout the UK."
Chancellor Rachel Reeves added that the loan would help JLR "support their supply chain and protect a vital part of the British car industry."
According to the BBC, the Unite union, which represents thousands of employees at JLR and in the supply chain, said the loan was "an important first step."
Last week, JLR was able to restore some of its IT systems following the back, and was able to start paying some of its suppliers – although it has said the earliest date that production wil resume will be 1 October.
The hack incapacitated the Land Rover maker, forcing it to shut down its internal computer systems in an effort to protect data from being stolen. This resulted in production shutdowns at all of its global plants, created issues with parts ordering and stifled retailers.
On Thursday 25 September JLR confirmed that “sections of our digital estate are now up and running”, including its payment systems – and the company is “now working to clear the backlog of payments to our suppliers as quickly as we can”.
JLR’s Global Parts Logistics Centre, which supplies the parts distribution centres for retailers globally, was also described as “returning to full operations”, meaning servicing and repairs can once again take place.
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At the end of last year, long before Mr Trump introduced his tariffs, the EU imposed a 20% import duty on imported cars from China, the argument being unfair competition because the Chinese gov subsidised their car industry.
So the question is, should the EU now impose a 20% import duty on JLR cars?
A loan needing to be paid back (backed by the government) is very different to companies partially owned by the government and heavily subsidised by the government!
This is not JLRs mess- that is like saying that every house that gets burgled is the householders fault. JLR is due to invest around £9B in next 4 years in the UK plus up to £5B in Somerset. They have to deal with 43,000 of their own employees. Its a short term funding from Government to a sector that pays over £25B a year back into the Exchequer. TATA could easily pick everything up and move it overseas. Let's all grow up and support a key industry for over 250,000 well paid jobs that pays a lot of taxes to support a growing proportion of layabouts and old people.
This is not British tax payers' mess either. Other companies, including the likes of Microsoft, Google etc who employ thousands of people in the UK, that suffer cyber attacks have to fund their own cost issues, and don't go to the British governments for loan handouts. Tata is a huge conglomerate, easily able to afford any short-term fuding issues with JLR. If Tta threatened the UK with moving its JLR operations elsewhere (which would be a massive PR own goal), then it would be effectively engaging in finicial blackmial.
As it stands its not a tax payer mess either, JLR has taken a loan from a commericial bank.
If they default which is unlikely the government can step in and back the loan. Which lets be realistic is probably a days worth of wasted cash even if they needed to repay the entire amount and at least they would be supporting jobs and industry instead of the money just vanishing as its uaually does.
If this were to happen to Stellantis this forum would be full of trash comments, but since the Indians still assemble some cars in the UK some feel the urge to exonerate them.
JaG: Sorry chaps, looks like we won't be able to pay you this month. We've had a little bit of a hiccup in the computing and the e-letters and whatnot, it's the darndest thing! We do apologise!
JaaaaaaaaaaGGGGGGGGGGGG!