Sarah JulianBBC Radio WM and
Eleanor LawsonWest Midlands
Reuters
There are around 100,000 people in Jaguar Land Rover’s supply chain whose work has been impacted by the cyber attack
Some businesses in the Jaguar Land Rover (JLR) supply chain have just seven to 10 days of money left, an MP has told the BBC.
In the wake of a cyber attack on the car maker last month, which has led to a shutdown lasting weeks, 10 companies within the chain voiced concerns about their prospects at a meeting with the government’s Business and Trade Committee on Thursday.
Labour MP for Tamworth Sarah Edwards, who is a committee member, said some of the companies had not been paid by JLR since the end of August.
“They’re very worried, they are concerned,” Ms Edwards said. “It’s imperative suppliers are paid very very quickly.”
JLR, which has plants in Solihull, Wolverhampton and Merseyside, employs about 30,000 people directly, with an additional 100,000 in the supply chain.
Ms Edwards said the 10 companies in attendance at Thursday’s meeting covered a “cross section” of first-line direct suppliers, covering the “whole eco-system” of the supply chain.
She expressed particular concerns about the smaller suppliers and their cashflow concerns.
“It’s very worrying and that’s because we’re nearly a month into this – some of those suppliers had not been paid,” she said.
“We heard from one supplier who had still not received payment from JLR since 29 August, so it’s really good to hear that the [JLR] invoicing system is coming back online.”
A survey of 84 companies – between them employing nearly 30,000 workers in the West Midlands – revealed 77% of the firms reported the cyber-attack had had a negative impact on their business.
Some 35% told the Greater Birmingham, Black Country and Coventry & Warwickshire Chambers of Commerce they had cut staff hours as a result.
JLR said on Thursday that it had begun a “phased restart” of its operations with parts of its IT system back up and running.
Tamworth MP Sarah Edwards says businesses are “very worried” with some having just days left of cash
Ms Edwards said some of the suggestions from the businesses were how to keep money within the supply chain and how the government might be able to support that.
“The feeling was [the need to] retain the work force and skills and having the immediate cash flow to keep these places open,” she said.
“We heard from one smaller supplier who’s already had to sell machinery, sell one of their trucks and go from two buildings down to one.
“Some people are at home already, they do not know whether they’ll be returning to work and when.”
The MP added that JLR needed “to be much clearer on the timeframe” for the return to production, as suppliers were unable to plan, meaning “they’re at a much higher risk of not being able to weather this.”
She said that some of the businesses thought that JLR “could have done more to communicate with them” and wanted clarity on the situation.
One idea the government is exploring is for it to buy the component parts built by the suppliers to keep them in business until JLR’s production lines are up and running, and then sell on those parts to JLR.
Ms Edwards said the businesses were pleased to hear it was an option being discussed but believed there would be “logistical challenges”.
“This is a ‘just in time’ operation, so storing those parts, making sure they’re not damaged, making sure that quality control is intact would be difficult,” she said.
“One of the thoughts [from the suppliers] therefore was that you could buy forward, so you’d essentially place the orders knowing you were going to start production but pay now. That’s an option they thought was more likely.”
Addressing the role of the government in supporting the supply chain, the MP said: “This is JLR and their issue, it shouldn’t really lie with the taxpayer, but it may be the taxpayer needs to step in temporarily.”
The Conservative Party said it would back a targeted emergency loan scheme for UK firms after the cyber attack affecting JLR.
The Tories have also called on the government to look into new cyber insurance measures.
“JLR’s supply chain is significant in the West Midlands and nationally,” said shadow business secretary Andrew Griffith.
JLR is owned by Indian firm Tata, which is majority owner of Indian IT company Tata Consultancy Services (TCS).
Parliament’s Business and Trade Committee wrote an open letter to Tata Consultancy Services (TCS) CEO on Friday, asking whether TCS would be carrying out an internal investigation into the cyber-attack on Jaguar.
TCS has also provided IT services to Marks and Spencer (M&S) and it emerged in May that an investigation was launched by TCS to determine whether it was the gateway for a cyber attack on the British high street retailer.
In Friday’s letter, MPs asked TCS what its role was in connection with JLR, M&S and supermarket chain Co-op, which suffered a cyber-attack at almost the same time as M&S in late April.
The committee members also asked TCS whether it would share any findings from investigations into attacks on M&S and Co-op.
The BBC has approached TCS for comment.
