By birminghammail.co.uk

Copyright birminghammail

A business professor has questioned the government’s proposal to help Jaguar Land Rover suppliers after the Midland car giant was crippled by a catastrophic cyber attack. The company said on Thursday, September 25 that it had begun a “phased restart” which included clearing a backlog of payments to suppliers after production lines were halted at plants for nearly a month. Earlier this week, the Government said it would look at buying parts from the supply chain but Prof David Bailey, from the University of Birmingham business school, asked where they would store “30 million components a day.” READ MORE: Small business owners ‘hurting’ as they lose hundreds every day amid Jaguar Land Rover’s shut down City-Redi research institute estimated that JLR supports 77,000 jobs in the region. Prof Bailey said: “Apparently the government is apparently looking at a scheme whereby it acts as ‘buyer of last resort’, buying components from the supply chain before selling on to JLR when it restarts production. “Let’s be clear – this is worth exploring, but there are a few things to bear in mind. If the government starts buying components, where will it put all the stock it buys ? “Each car has as many as 30,000 components, and JLR makes 1000 cars a day. That’s 30 million components A DAY. There isn’t a warehouse big enough in the country to store all of that. That’s why there is a just-in-time system. “So maybe the idea the government is considering is a virtual one, so the government pays suppliers for components then gets paid by JLR when the latter restarts and the parts are actually made and delivered? “If so is this a a fancy way of giving a cash advance as a go-between, between JLR and suppliers? If it works in getting cash into the supply chain fast then it is worth trying.” Prof Bailey said other options should be considered, such as temporary wage replacement schemes and supplier loans/loan guarantees, which were used when Longbridge MG Rover went bust. He said: “Again look to past experience. The HMRC could give payment holidays to firms and councils could defer business rates to help firms stay afloat. “These will also be critical in keeping the supply chain in place so JLR can restart production down the line. But the government really needs to stop listening and actually DO something. “JLR is burning through, we reckon, some £1bn in cash a month and can keep going for three or four months but bits of the supply chain are about to fall over. By the way, JLR has manually paid out £300m to suppliers in recent days to keep them going in a pretty heroic effort given their systems are down, in this backs-to-the-wall situation. “JLR is facing its biggest crisis ever and is doing its bit to keep suppliers going.”