The government will underwrite a £1.5bn loan guarantee to Jaguar Land Rover (JLR) after a mass cyber attack forced a shutdown.
JLR suspended production at its UK factories following the cyber attack on 31 August. The shutdown is expected to last until 1 October, leaving the largest UK carmaker’s suppliers in limbo.
The loan is expected to give suppliers some certainty amid the continued shutdown, as the £1.5bn will help bolster JLR’s cash reserves as it pays back companies in its supply chain.
The government will give its backing to the loan through the Export Development Guarantee (EDG), a financial support mechanism aimed at helping British companies that sell their goods overseas.
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The £1.5bn loan, from a commercial bank, will be paid back over five years.
“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,” Business Secretary Peter Kyle said.
Chancellor Rachel Reeves added: “Jaguar Land Rover is an iconic British company which employs tens of thousands of people – a jewel in the crown of our economy.
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“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.”
As a result of the attack, production was halted across the car-making supply chain, with thousands of staff off work.
More than 33,000 people work directly for JLR in the UK, many of them on assembly lines in the West Midlands, the largest of which is in Solihull, and a plant at Halewood on Merseyside.
An estimated 200,000 more are employed by several hundred companies in the supply chain, who have faced business interruption with their largest client out of action.
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Ministers have had daily contact with JLR and cyber experts following the attack as the company attempts to restart production at its UK factories.
Unions and politicians have warned that small suppliers producing parts for JLR could collapse as a result of the shutdown unless they receive urgent financial support.
This week, Mr Kyle met workers and bosses at Webasto, which makes sunroofs for JLR.
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The brand has the largest supply chain in the UK automotive sector, which employs around 120,000 people and is largely made up of small and medium-sized businesses.
The government’s promise of underwriting the JLR loan has been praised by the Unite union, whose general secretary Sharon Graham said the loan was “an important first step and demonstrates that the government has listened to the concerns raised in meetings with Unite over recent days”.
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She added: “This is exactly what the government should be doing, taking action to protect jobs.
“The money provided must now be used to ensure job guarantees and to also protect skills and pay in JLR and its supply chain.”
