Impact on JLR supply chain might last months – chief executive

It could take months before the benefits of Jaguar Land Rover resuming production filters down to the supply chain, a chamber of commerce said.

JLR has said it would resume some production in the “coming days” after a cyber-attack forced the carmaker to suspend operations.

At the weekend it emerged the government will underwrite a £1.5bn loan guarantee to the company in a bid to support its suppliers.

Chief executive of Coventry and Warwickshire Chamber of Commerce Corin Crane said it replies to a survey it carried out indicated one in six businesses were already making redundancies with others putting workers on zero-hour contracts.

Mr Crane said 84 businesses replied to the survey, all from JLR’s supply chain.

“They accounted for 30,000 employees, so you can see how big this issue is right across Coventry and Warwickshire, [the] Black Country and Birmingham, and most of those businesses [have] been impacted.

“Nearly half of them have been impacted financially.”

Work at JLR’s three UK facilities in the West Midlands and Merseyside was halted on 1 September.

The BBC has understood manufacturing will resume first at the engine facility in Wolverhampton on 6 October, while production at other plants will have a phased return.

Mr Crane said JLR would start paying “their tier one suppliers”, but how “the ones below those tiers get paid is a little bit more difficult to pick out.”

He added: “That 1.5 billion is great… We probably need more and… need it quickly.”

Coventry-based Evtec Automotive, which employs about 600 people, said it had probably laid off about 500 to date.

Chairman David Roberts stated: “We’re paying them on 80% of their normal pay.

“That’s coming out of our cash flow, obviously.”

Asked whether the government acted quickly enough, he replied: “I’m slightly underwhelmed by the government’s response to how they handled it.

“If the UK wants to have advanced manufacturing capability, if it wants 200,000 people who are employed in the industry to carry on, it’s really got to come through a little bit… quicker and more agile to support the supply chain.”

Mr Roberts also said the majority of “the tier ones really know their supply chain, so there’ll be very strong at making sure that tier two, tier three is supported”.

Business Secretary Peter Kyle has previously said the loan guarantee would help protect jobs in the West Midlands, Merseyside and elsewhere in the JLR supply chain.

“We are offering a £1.5bn credit facility to JLR with the explicit intention that that is to support the supply chain into JLR as well,” he said.

“This is a big moment, this will offer an enormous resource for JLR and the supply chain to get through the immediate challenges that they face.”