JAGUAR Land Rover has warned it will “take weeks to recover” after it was hit by a crippling cyber attack and customers have been left in limbo.
Workers at Britain’s biggest carmaker have been put on leave which is having a knock-on effect on West Midlands firms reliant on the company’s business.
Factory staff at JLR’s two main assembly plants in Solihull and Halewood have been told not to come to work tomorrow and its engine manufacturing centre in Wolverhampton also stands idle[/caption]
JLR bosses are said to have conceded that making its systems operational again will take ‘a matter of weeks rather than days’[/caption]
The West Midlands automotive sector is currently grappling with its worst crisis since the enforced shutdown of British car making due to the Covid pandemic.
Jaguar Land Rover’s (JLR) cyberattack has not only brought production in the UK, Slovakia, Brazil and India to a halt but its computer systems have been rendered useless.
That has had an impact on performing diagnostic tests, so cars cannot be serviced properly at dealerships.
It also means online catalogues of spare parts cannot be accessed and new vehicle sales can’t be registered.
Factory staff at JLR’s two main assembly plants in Solihull and Halewood have been told not to come to work tomorrow and its engine manufacturing centre in Wolverhampton also stands idle.
Hopes of having a quick fix to end the saga have now gone up in smoke.
A well-placed source told The Times: “We said don’t come into work on Friday and Monday. That does not mean come to work on Tuesday.”
Behind closed doors, JLR bosses are said to have conceded that making its systems operational again will take “a matter of weeks rather than days.”
The source added there will also be a “long tail of work that will take even longer”.
JLR’s troubles though are just the tip of the iceberg for the West Midlands economy with a number of company’s reliant on the car manufacturer and its Indian owner, Tata Motors.
Raj Kandola, chief executive of the Birmingham Chambers of Commerce, said: “Jaguar Land Rover is an anchor institution.
“It’s not just about the people it employs directly, it’s the supply chains.”
SUPPLIERS HIT
Suppliers Evtec, WHS Plastics, SurTec and OPmobility are among those known to have temporarily laid off their workforces, impacted by JLR’s troubles.
Those four companies employ more than 6,000 UK workers.
Evtec’s Roberts said the fallout is far worse: “You’re talking about many, many thousands of people who are currently waiting … [to] get back to work.
“We continue to work around the clock to restart our global applications in a controlled and safe manner following the recent cyber incident.
“We are working with third-party cybersecurity specialists and alongside law enforcement.”
A spokeswoman for JLR said this weekend: “We want to thank all our customers, partners, suppliers and colleagues for their patience and support.
“We are very sorry for the disruption this incident has caused. Our retail partners remain open and we will continue to provide further updates.”
JAGUAR REBRAND
Some people have pointed to the relaunch of the Jaguar brand last November as the start of carmaker’s problems.
Boss Adrian Mardell had moaned that the Jaguar brand “wasn’t always distinctive enough in the last decade” and its distinctive badge which had been used for decades was dropped in an attempt to attract younger, richer and more urban customers.
Its fleet of new cars would due to be launched next year would also position the firm to directly compete with more upmarket brands like Bentley and Porsche.
The move faced a stern backlash with even US President Donald Trump wading in, calling the switch “stupid”, “seriously WOKE” and a “total disaster”.
TRUMP TARIFFS
While the company faced a PR backlash it was also faced with Trump imposing import taxes of 25 percent on cars and car parts.
A move that would have a big impact on the company as the US is JLR’s biggest single market, with around a quarter of the vehicles it makes shipped across the Atlantic.
It can’t get around the tariffs as it doesn’t have a factory in the US.
Just 11 days after Trump’s edict, JLR paused shipments to America.
The suspension carried on until May 3, days before Trump shelved plans for import taxes on cars.
Britain and the US announced at trade deal on May 8, where 100,000 cars a year could be sold at a 10 percent tariff – although this was four times higher than the pre-2025 rate of 2.5 percent.
It wasn’t all bad news though as on May 13, JLR revealed its best return for a decade, bringing in a £2.5 billion pre-tax profit in the 12 months to March.
This was down to bumper sales of the Slovakian-made Land Rover Defender.
Still though JLR’s troubles weren’t over.
In early August, Mardell announced he was stepping down after three year.
PB Balaji, finance chief at Tata Motors, was brought in as his replacement with plans to take JLR “to even greater heights”.
But it emerged that quarterly profits dropped by a significant 49 percent in the wake of Trump’s protectionist strategy.
CYBERATTACK
Then to top it all, it suffered the cyberattack.
David Bailey, professor of business economics at Birmingham University, said it was hard to overestimate the impact of last Sunday’s breach.
He said: “This is pretty catastrophic for JLR. It comes hot on the heels of concerns about the electric vehicle transition and being hit by Trump tariffs.
“The hit to profits is going to be in the region of £5million a day. And the longer this goes on, the worse this hit will be – and the greater the likelihood that customers will go elsewhere.”
A swift resolution seems unlikely, with one big JLR dealer saying: “They can’t give us a timeline.”
Some of the problems faced by dealers have been eased thanks to workarounds using third-party technology but if there was a need for a major recall it would be hard to get the message out to customers.
A group called the “Scattered Lapsus$ Hunters” has claimed responsibility for the attack.
The organisation is said to be affiliated with a hacker collective called The Com, which is connected to Scattered Spider, the group behind the hacks of M&S, Harrods and the Co-op.
Roberts, at Evtec said: “They haven’t [made] a car all week.
“And because of no production and the complete loss of the systems, we’re all sort of manually driven at the moment.
“So the biggest suppliers in the West Midlands have already laid off their workforces temporarily.”
He added: “Quite a lot of them were told to report back on Tuesday, unless we give them updated information early next week … And we’re now waiting on JLR’s feedback so the supply chain can react to it.”
JLR insiders say that feedback is unlikely to be positive.
Speculation is growing that production will be hit for “most of September” with some company insiders fearing it could be even worse.
Roberts said: “Imagine trying to start up the Solihull assembly line on a brand new IT reset system. Every vehicle on that line has got its own Vin [vehicle identification number]. Every vehicle’s got its own configuration.
“You almost have to cleanse the line and start again, or you try to manually finish off these vehicles. And that’s that, a big old process. That’s not easy. If you’ve got to reset the whole system, it won’t be a smooth start.”
HOPE GOVERNMENT COULD STEP IN
There is some hope the government could step in with financial support to help cushion the impact on JLR’s suppliers.
In 2011, ministers coughed up £150million of funding to the automotive supply chain as Nissan and Honda’s UK production lines ground to a standstill following the earthquake in Japan that caused the Fukushima nuclear disaster.
Palmer said: “I don’t know the JLR cost base, but you lose a few hours on a production line … that’s an enormous amount.
“It runs into billions, really, really quickly. So, more than any single company can withstand by themselves. So, yes, you probably end up with some form of [state] bailout.”
The government said: “We are working closely with JLR to understand the challenges they and their suppliers are facing following this incident. We recognise the vital importance of JLR to the UK automotive sector, and particularly to the West Midlands and north west.
“We are continuing to monitor the situation closely and the National Cyber Security Centre is working with Jaguar Land Rover to provide support in relation to this incident.”
It’s not an entirely bleak outlook though and there is a slither of optimism.
Sarah Hutchins, the boss of the biggest independent supplier of Jaguar and Land Rover surplus stock in the UK from her base in Bromsgrove, Worcestershire, said: “We can’t access the parts catalogue.
“It’s very difficult to be able to answer customers’ questions because you can’t get access to the database. But equally, it’s probably working a bit in our favour because where customers can’t buy from the dealers at the moment, they’re coming our way.”
Dealerships are also being affected by the problems caused by the cyberattack[/caption]
JLR has apologised for the disruption[/caption]