Billion-dollar loan secured to assist JLR suppliers

WITH the British Government providing a loan guarantee, JLR has been able to secure a credit facility to support its cyberattack-affected supply chain from commercial banks including: HSBC, MUFG, and NatWest.

It is purportedly the first time the UK government has offered direct financial support to a private company specifically due to a cyberattack.

JLR's supply chain was severely impacted by the hack starting from 31 August that forced global production shutdowns idling plants in the UK, Slovakia, Brazil, and India concurrently derailing its supply chain.

The credit facility, said to amount to £500 million ($A1.02 billion), is being disbursed through JLR’s vast supplier network.

A phased restart of JLR’s production facilities has already commenced with UK media outlets saying there was a broad consensus that the company is unlikely to be fully up and running again until after Christmas.

The restart was initiated at JLR sites across the West Midlands, including at its engine-making factory in Wolverhampton and its battery assembly centre in Hams Hall near Birmingham, which produces batteries for its electric vehicles.

The Guardian reported work will also recommence at its stamping operations in Castle Bromwich, Halewood, and Solihull, and other important areas of its Solihull factory, such as its body shop, paint shop and its logistics centre, which feeds parts to JLR’s global manufacturing sites.

In relation to JLR’s overseas operations vehicle manufacturing in Nitra, Slovakia is scheduled to restart soon possibly coinciding with the Range Rover and Range Rover Sport production lines in Solihull this week (by 11 October).

The publication could not give an update on JLR’s Halewood plant on Merseyside but said it will be able to do that “soon”.

JLR’s new financing scheme will provide its struggling suppliers with cash upfront during the restart period.

“This means those that qualify will be paid much faster than usual, aiding their cash flow, it said. The scheme will then be expanded to include some non-production suppliers,” reported The Guardian.

Clarifying the company’s current position, a JLR spokesperson said in a statement, “As the controlled, phased restart of our operations continues, we are delivering solutions to support JLR’s suppliers which to date include establishing a dedicated supplier help desk, introducing a manual payment system to settle outstanding invoices and re-establishing automated supplier payment systems”.

JLR is owned by India’s Tata Motors (Tata Group) and is a key part of the UK’s auto industry, with small (and larger) suppliers reliant on it for business. Because of this, the hack and subsequent shutdown at JLR may have precipitated a knock-on effect at other UK-based automakers.

Had the UK government not stepped in with the loan guarantee a wave of collapses in the supply chain may have eventuated.

Sources say JLR has also sought to raise an additional £2.0 billion ($A4.06 billion) to shore up its finances already under pressure from other issues before the cyberattack.