By Karl Matchett

Copyright independent

The government is looking at ways to support businesses hit by the Jaguar Land Rover (JLR) cyber attack, which has halted production since August.

The car manufacturer announced earlier this week that manufacturing would not resume until October at the earliest. JLR’s workers were told to stay at home shortly after the shutdown began, but there has been no firm resolution on support for its suppliers.

Unions have called for a Covid-style furlough operation for those in the supply chain, but this is not thought to be viable given the scale and the cost. Businesses are also reportedly unwilling to consider a government-backed loan, given the uncertainty they currently face.

Several other options the government is said to be considering include directly purchasing the parts JLR would normally buy from suppliers .

It is thought that JLR is the biggest or only customer of some of these companies, meaning that while the usual 1,000 or more cars a week are not being produced, their own operations are also shut down.

JLR operates a JIT (just in time) model across its manufacturing plants, meaning they do not store huge quantities of parts or have a backlog; instead, they rely on them being produced and delivered as needed based on expected production times.

It comes after reports emerged that JLR had failed to arrange a cyber insurance deal for the company before it was hit by the attack.

That means the company could be forced to foot the bill, running into tens or hundreds of millions of pounds, for its own lost business, and for fixing internal systems. Some are suggesting that its parent company – Indian firm Tata Group – should be on the hook for any losses, as well as potentially supporting its own supply chain.

JLR’s most recent quarterly statement showed that the company had a cash balance of more than £3bn. Ministers have said that the only support provided to the supply chain at this stage has come from JLR.

The business and trade minister Peter Kyle met with supply-chain businesses earlier this week, and the select committee is set to do the same today (Thursday). BBC News reports that there are doubts about whether some of these businesses can “remain viable” if JLR does not resume production soon.

Industry minister Chris McDonald said he believes JLR will get through the cyber attack, but that the incident should be regarded as a “wake-up call”.

“What I really want this to be is a wake-up call to British industry. I’m affronted by this attack on British industry. This is a serious attack on a flagship of British industry,” he said.

Marks & Spencer said the cost of the cyber attack it dealt with earlier this year was around £300m, while the Co-op said the attack on its operation over the summer cost £206m. JLR is expected to be losing at least £50m a week in lost production.

Business secretary Mr Kyle added on ITV News: “Everyone has to do what they can to support the workforce right the way through the supply chain.

“JLR is a profitable company, it is backed by a wealthy global company, and it is a private-sector company. JLR … is, to my knowledge, doing what it can in a responsible way in this difficult moment. And I have been very clear that they must do all they can, to protect the jobs, not just in JLR, but to think carefully about their responsibility for workers all the way down the supply chain.”