Britain’s government is considering providing financial support for carmaker Jaguar Land Rover’s suppliers after a shutdown caused by a cyberattack was extended until October, a government source said on Thursday.
Britain’s biggest carmaker Jaguar Land Rover is extending the closure of its factories until October 1 following a cyberattack in early September that has left its operations paralyzed and smaller suppliers struggling.
The luxury carmaker, owned by India’s Tata Motors, has three factories in Britain, which together produce about 1,000 cars per day. The company is losing 50 million pounds ($68 million) a week, according to the BBC, with many of its 33,000 staff told to stay at home.
The breach highlights the vulnerability of global businesses and government departments to increasingly sophisticated and more frequent cyber and ransom attacks, affecting sectors from healthcare and defense to finance and retail. No details have been released about who might be behind the attack on JLR.
WORRIES OVER INSURANCE
The automaker failed to finalize a cyber insurance deal brokered by Lockton ahead of the incident, and appears to be uninsured directly for the attack, three senior cyber insurance market sources told The Insurer. JLR declined to comment.
British business minister Peter Kyle and industry minister Chris McDonald visited JLR on Tuesday and talked to the CEO and senior executives about the impacts of the attack and how the company can work towards restarting production.
“We have two priorities – helping Jaguar Land Rover get back up and running as soon as possible and the long-term health of the supply chain,” said McDonald.
JLR said in a statement that as part of a “controlled, phased restart of our operations,” some of its systems were back online and it was working to clear a backlog of payments to suppliers as quickly as possible. It did not comment on the BBC figures.
As well as wanting to keep the supply chain intact and save jobs, the government, which has set out plans to ban public sector bodies and critical national infrastructure operators from paying ransom demands, will be conscious of the hit to the economy from the shutdowns.
S&P Global’s survey of the UK manufacturing sector on Tuesday showed a downturn in output, with some factories saying JLR’s shutdown impacted activity in the automotive supply chain.
HIGH-PROFILE CYBER ATTACKS
Over the weekend, a ransomware attack on a company that facilitates airport check-in left passengers stranded across major European airports, with experts saying cybercriminals are taking greater risks by hitting high-profile targets to get bigger payoffs and boost their online reputation.
In Britain, just over four in ten businesses reported experiencing some form of breach over 12 months, according to official data published in June. Household names, including Marks & Spencer and Co-op42, have fallen victim in recent months.
JLR said on Tuesday it was preparing plans to resume production even as it extended the pause.
“We have made this decision to give clarity for the coming week as we build the timeline for the phased restart of our operations and continue our investigation,” JLR said.
JLR, which makes the Range Rover and Defender models, said its production supported 104,000 jobs in supply chains across the country. The Unite trade union has warned of job losses and called for government support to keep companies solvent.
OME SYSTEMS BACK UP AND RUNNING
JLR said it had told suppliers some systems were online, including the ones that control the supply of parts worldwide and the financial system that controls the wholesale of vehicles. It also said capacity for processing invoices had increased.
“We are now working to clear the backlog of payments to our suppliers as quickly as we can,” a JLR spokesperson said.
The British Parliament’s Business and Trade Select Committee wrote to finance minister Rachel Reeves after meeting companies in JLR’s supply chain on Thursday, asking how any support schemes would work.
“Smaller firms, we were told, may have at best a week of cash flow left to support themselves. Larger firms, we heard, may begin to seriously struggle within a fortnight – and many are simply unclear how they will pay payroll costs at the end of October,” the committee’s letter said.
Tata Motors finance chief P B Balaji told the committee’s chair Liam Byrne in a letter dated Tuesday that JLR was working with its supply partners to prioritize payments to “those with the greatest need,” adding that JLR intended to settle any outstanding payments “in the coming weeks.”
“We are engaged across multiple stakeholders to find solutions to support JLR’s commercial partners and hope to find a practical, workable solution at the earliest,” he said.
Mike Hawes, the head of Britain’s automotive trade body SMMT, said the cyberattack’s impact on the supply chain and wider industry on which it depends was “severe and of indeterminate duration.”
(Reporting by Paul Sandle, Muvija M, Elizabeth Piper and William James; Editing by Mark Potter, Hugh Lawson, Barbara Lewis and Diane Craft)
($1 = 0.7400 pounds)