Automotive Component Manufacturers Brink of Bankruptcy Due to Cyber Attacks
Jaguar Land Rover's Production Freeze Enters Third Week, Threatening Suppliers
Jaguar Land Rover's global vehicle production remains at a standstill, with no signs of resuming soon. The automotive giant has been battling a cyberattack that has crippled its computer systems since September 1.
The production freeze has brought the assembly lines, supply chains, and staff shift allocations to a complete halt. This prolonged shutdown is estimated to cost Jaguar Land Rover approximately £5 million ($6.76 million) per day.
The financial stability of suppliers depends on the duration of this production freeze. Key suppliers of Jaguar Land Rover, such as the British manufacturer Webasto, which supplies glass roofs, are facing potential bankruptcy due to the halted demand for their components. Webasto has had to close its factory in Sutton Coldfield, Birmingham, and reduce staff as a result.
Other suppliers, like Qualplast, a flock coating company that applies tiny fibers to surfaces to give them a velvety texture, used for cabin parts such as glove boxes, armrests, and door pockets, are also feeling the pinch. Qualplast has other work that they can temporarily assign their staff to, but this may not be sustainable in the long term.
Shaun Adams, managing director at Qualplast, states that the impact on suppliers could be catastrophic due to cash flow disappearing. He suggests that if the production freeze persists for weeks, they would need to consider future-proofing measures.
Experts have told the BBC about the potential financial implications of this cyberattack on Jaguar Land Rover. The potential financial implications extend not just to Jaguar Land Rover but also to its suppliers and the companies that provide specialized components.
Jaguar Land Rover's U.K. staff have been told not to expect a return to work until at least Wednesday. The company has immediately shut down all its IT services following the cyberattack.
As the production freeze enters its third week, the long-term effects on suppliers like Qualplast could be significant if it continues for an extended period. The automotive industry will be closely watching Jaguar Land Rover's recovery from this cyberattack and its potential impact on the industry as a whole.
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