Ministers are considering buying parts from Jaguar Land Rover’s (JLR) suppliers to save them from collapse after a cyber hack halted production.
Peter Kyle, the Business Secretary, is working on plans to save JLR’s suppliers from the brink of bankruptcy after rejecting calls for a furlough scheme, according to ITV.
Instead, the Government plans to purchase parts from the suppliers directly and sell them back to JLR when it restarts production.
The carmaker halted production at its three UK assembly plants – in Solihull, Halewood and Wolverhampton – on Aug 31 after a cyber attack knocked out its systems.
JLR has extended the pause until Oct 1 at the earliest, putting pressure on suppliers who have in some cases been forced to stop work and lay off staff as work dries up.
The shutdowns have led to concerns that suppliers could be plunged into bankruptcy amid fears of widespread job losses across the companies, which employ around 200,000 staff.
On Tuesday, Mr Kyle visited JLR and met executives. He refused to commit to a government bailout for suppliers, suggesting workers could sign on for unemployment benefits instead.
JLR has deployed 50 staff to process a backlog of £300m worth of payments owed to its suppliers in a scramble to save them from insolvency, according to Bloomberg.
Industry experts have estimated the shutdowns are currently blocking JLR from manufacturing around 1,000 new vehicles a day, at a cost of £72m in lost sales for every day that production at its factories remains closed.
It has now emerged that JLR may have to carry the full costs of the hack after reports suggested the carmaker had no cyber insurance policy in place at the time of the attack.
The company was negotiating the policy through its insurance broker, Lockton, but had failed to finalise a deal when it was attacked, The Insurer reported.
JLR and Lockton declined to comment. The Government also declined to comment.
Separately, new figures from the Society of Motor Manufacturers and Traders (SMMT) showed that UK motor vehicle production fell 18pc to fewer than 38,700 cars and vans in August after rising in the prior two months.
Production of hybrid and battery-electric vehicles rose by more than two fifths from a year earlier with the sector accounting for 45pc of all units built, the second-highest share on record.
The figures don’t include the impact of the cyberattack on JLR, which are likely to be evident in September’s data, the SMMT said.
