A member of cyber attack-hit Jaguar Land Rover’s (JLR) supply chain has told Sky News the government must act to safeguard the sector as it has seen no financial relief to date.
Mike Beese, who owns Walsall-based Genex UK, was speaking as an industry body complained that support revealed by the government last week was failing to reach suppliers.
While unveiling a £1.5bn loan guarantee to JLR last Saturday, Business and Trade Secretary Peter Kyle said it would “help support the supply chain and protect skilled jobs in the West Midlands, Merseyside and throughout the UK.”
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Many interpreted the liquidity offer as a bailout, of sorts, that JLR would draw down on and distribute to ease pressure on direct and indirect suppliers.
Businesses affected by the production shutdown are now arguing they need the support they thought they were being promised by the Secretary of State.
It is unclear how Mr Kyle’s department and the chancellor saw the loan guarantee working in practice.
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JLR is understood to have not seen a need to draw on any such arrangement to date as its direct suppliers – the companies it deals with – have continued to be paid through existing funds.
It expects that money to trickle down to lower tiers of that supply chain.
The production shutdown has entered a second month and there is no visibility on when factories will get back to full speed.
Mr Beese said it was for this reason that the government had to intervene, potentially through a loan scheme for suppliers. “We need certainty”, he declared.
He said of his own customers: “We need that money to come in so we can pay our suppliers. “That money needs to cascade down the tiers,” he added [but] “it’s not going to be enough and you’ve got to make that up at some point.
Mr Breese, who employs 17 people and provides parts for several major JLR suppliers, said he attached no blame to JLR, which has been losing at least £50m a week since the attack in late August.
He also laid no fault at the door of the companies he supplied. “Only the government” could bring the relief the industry needed, he argued, while explaining that terms from lenders were out of reach given the scale of the uncertainty.
Commenting on the toll the crisis was taking, Mr Beese added: “It’s very stressful… people in the same boat are ringing me to be paid. “My staff all need certainty as well… these people aren’t just a number, they have families”, he said.
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The president of the Confederation of British Metalforming (CBM), Stephen Morley, said: “We need to find a way to get money quickly to where it is needed most, to prevent the supply chain from completely collapsing and that could be an additional type of loan.
“JLR is rightly focused on getting payments through to their first-tier suppliers, and it’s best we allow them to complete that process.
“Our focus now must be on ensuring that second tier and smaller suppliers in the chain are supported, so the whole framework is in place when production restarts.”
JLR revealed earlier this week that it planned to resume limited production “in the coming days” as it continues efforts to restart key IT systems.
No firm date has sine been announced.
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A spokesperson for JLR said: “As the controlled, phased restart of our operations continues, we are delivering solutions to support our suppliers through the period of disruption caused by the cyber incident.
“This includes establishing a supplier help desk with additional resources, putting in place a manual payment system to clear down outstanding invoices, and working to re-establish the automated supplier payment systems.
“We would like to thank everyone connected with JLR for their continued patience, understanding and support. We know there is much more to do but the foundational work of our recovery is firmly underway, and we will continue to provide updates as we progress.”
A spokesperson for the Department for Business and Trade said: “We acted swiftly to protect JLR, recognising the importance of the tens of thousands of people they employ directly and indirectly and to provide the company with liquidity at a key time.
“We continue to work with JLR and suppliers directly to understand the impact of the cyber attack – including on tier 2 and tier 3 suppliers – and how the support put in place is helping them.”
