'It's started already': Car industry expert warns Black Country jobs are being lost because of Jaguar Land Rover cyber attack
A motor industry expert has warned that thousands of jobs are at risk as a result of the cyber-hacking crisis at Jaguar Land Rover.
Prof David Bailey, of Birmingham University, called on the Government to introduce a furlough and emergency-loan scheme to protect jobs in the car parts supply chain, warning that companies in the Black Country would go bust if action was not taken.
He said companies were already laying workers off and seeking emergency loans to tide them over.
Production stopped at the West Midland-based car manufacturer, which has a plant at i54, near Wolverhampton, on September 1 following a cyber attack.
The company said production will not restart until Wednesday (24) at the earliest, and some experts have said it may not be until November.
Prof Bailey said this could be fatal for some of the small and medium-sized suppliers in the Black Country, and warned that other British car manufacturers, such as Toyota and Mini, could also be affected.
He said 100,000 people were employed by companies in the Jaguar Land Rover supply chain, many of them in the Black Country.
"it's pretty catastrophic, really," he said.
"They've said they're not going to restart until September 24 at least, but that doesn't mean to say they will restart September 24, but by then the hit to revenue will be about £1.7 billion, and to profits potentially £120 million.
"There's talk that this might actually go on to November, in which case we're looking at something like 50,000 cars not being produced, and a potential hit to revenue of £3.6 billion, and the loss of profit there could be over £200 million. It's huge."
Prof Bailey said Jaguar Land Rover was big enough to absorb the hit to its income, but this would not be the case for many of its suppliers.
"JLR will get through it, they made a profit of £2.5 billion in the year to March, but there will be a dent in its profits.
The big, big issue is the supply chain, which his literally running out of money as we speak.
"Birmingham and the Black Country is at the heart of the automotive supply chain. JLR supports 200,000 jobs in the UK, a significant chunk of those will be in the Black Country.
"The further you go down the supply chain, the less likely they are to be to have cash buffers to resist this.
"I think it's started already, I'm hearing form firms that have sent workers home, laid workers off, particularly agency workers, they've had to go for bank loans and are running out of money.
"That's why the Government has got to intervene pretty urgently in terms of some sort of wage furlough scheme and some kind of loan fund to companies to keep them going."
Prof Bailey said such schemes were common in countries such as Germany, where the Government had a system in place that would come into force when a specific shock affected a company or sector.
"It's the sort of thing we need here on a standing basis, rather than when there's a shock, an appeal being made to government who considers it all taking time. This should be a policy that is ready to roll."
Prof Bailey said he also believed there would, in future, need to be major changes in the way the car industry operates, particularly with regard to bespoke design and 'just in time' delivery.
"For years we've been talking about how the companies are connected," he said. "As a consumer, I place an order that goes to JLR, they design the car, the orders then cascade down the supply chain. There's going to have to be firewalls pub into that.
"Also I do wonder whether we need more stocks in the supply chain. For a few years the system has been 'just in time', and maybe we need to have stocks at different points just in case, so that companies can draw on things if they need to.
