Thought Leadership
The car manufacturer Jaguar Land Rover (JLR) has been struggling for more than two weeks with the consequences of a serious cyber attack. According to the company, production will not restart until September 24 at the earliest. However, industry insiders warn of disruptions into November.
The attack, which became known on September 1, forced JLR to completely shut down its IT networks. Since then, all production lines have come to a standstill, both at the British plants in Solihull, Halewood and Wolverhampton and at the international sites in Slovakia, China and India. The criminal investigation department has started an investigation.
Financial losses in the millions
According to estimates, the production stop is costing the group, which belongs to India’s Tata Motors, at least 50 million pounds per week. Normally, over 1,000 vehicles leave the production lines every day. Three and a half weeks of production will have been lost by the planned restart on September 24.
JLR acknowledged that data may have been viewed or stolen by third parties. The hacker group “Scattered Lapsus$ Hunters” claimed responsibility for the attack. The same group was already responsible for attacks on major retailers such as Marks & Spencer and the Co-op.
Suppliers in existential distress
However, the situation in the supply chain is causing the greatest concern. Many of the small and medium-sized companies affected do not have the financial reserves to survive a weeks-long outage. According to the BBC, industry experts are expecting companies to go bankrupt if support is not provided quickly.
“We are already seeing employers discussing possible redundancies,” Jason Richards of the Unite union warned the BBC. “People have to pay their rent and mortgages. What are they going to do if they don’t get a salary?”
Richards emphasized the risk to the entire supply chain: “If JLR turns the tap back on and expects the supply chain to be ready, it might not be there.”
Political action required
Unite is calling for the establishment of a short-time working scheme based on the German model, in which the state co-finances the salaries of employees who are unable to work due to the shutdown. The House of Commons Trade and Industry Committee has also called on the Chancellor of the Exchequer to present plans to support vulnerable suppliers.
Analysts are warning of lasting damage to the British engineering industry, on which hundreds of thousands of jobs depend. According to JLR, it is already in talks with some suppliers about possible support measures.
Restart remains complicated
Originally, JLR had hoped for a quick solution. However, it is now clear that the resumption of production is a complex process. Even after the planned restart on September 24, it is likely to take weeks before normal production capacities are reached again.
David Roberts, Chairman of the Evtec Group, a leading supplier, defended JLR: “We should not forget who is to blame here. This is all the fault of criminals. JLR is the victim here.”
