JLR Halts Production After Cyberattack; UK Government Steps In With £1.5B Loan Guarantee
Jaguar Land Rover (JLR) has been grappling with a cyberattack since late August 2023, leading to a complete halt in vehicle production. The UK government has stepped in, providing a £1.5 billion loan guarantee to help the company restart operations and safeguard its supply chain.
The cyberattack has left JLR unable to produce any vehicles, with a daily capacity of around 1,000 units. This has significantly impacted the company's suppliers, particularly small and medium-sized businesses. The Wolverhampton engine plant is set to reopen in early October, but a full restart of production is not expected until the end of 2023.
The loan guarantee is not a direct cash injection. Instead, it's a state-backed assurance that banks will recover 80% of loans if JLR defaults. This move aims to prevent a collapse in the supply chain, which supports around 120,000 jobs in the UK. The crisis at JLR comes amidst existing challenges such as slumping profits, falling sales, and delays in its electric vehicle rollout.
The cyberattack on JLR is part of a wider trend of high-profile hacks targeting British industry. In response, the Shadow Business Secretary has called for a new 'cyber reinsurance scheme' to shield UK firms from increasingly sophisticated cyber threats. The UK government's loan guarantee to JLR is a step towards mitigating the impact of such attacks on the country's economy.
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