City MPs are pressing for urgent action by the Chancellor for a ‘furlough’ style scheme to support suppliers to Jaguar Land Rover after cyber attack
The impact of the JLR cyber attack is being felt in supply companies including Webasto in Sutton Coldfield
Firms supplying crisis-hit Jaguar Land Rover fear they are going to have to lay off hundreds more workers within days without emergency help.
Companies linked to the car manufacturer are already being stung by JLR’s sudden temporary shutdown following a cyber attack.
Among them is Webasto, a global manufacturer and auto industry supplier, which employs around 350 people at its sunroof factory in Sutton Coldfield.
MP Ayoub Khan met with the firm today and described their situation as ‘perilous’.
The majority of the staff were currently ‘sitting at home’ on 80% salary, 34 had been let go and the remainder were working short weeks, he said. The firm is uncertain how long it can stomach the impact.
READ MORE: Jaguar Land Rover issues update on job safety after cyber attack
Another 100 or so suppliers to them were also impacted, said Mr Khan. “These people are a skilled workforce, they have mortgages, they’ve got to put food on the the family table, they’ve got bills to pay and an additional fear is that they are not going to be able to sit around waiting for their job to restart, they may have to go elsewhere. That means JLR could be impacted when it does get back up to speed because the supply chain will be broken.”
He is pressing the Government to intervene urgently to help prop up suppliers left devastated by the impact of the attack.
“The only way to ensure security for these corporations and their workers is by providing urgent and targeted financial intervention,” said Mr Khan following the visit.
“It’s the only way to stop a domino effect of mass layoffs and insolvencies. I am urging the Chancellor to authorise the roll-out of a furlough scheme, which will protect working families and support manufacturing companies while JLR works to return to full productive capacity.
“With the livelihoods of so many at stake, if there was ever a time for the government to help the manufacturing sector in the West Midlands, it would be now.”
The plant, spread over two sites, has produced sunroofs in Birmingham since the 1980s, for customers including Rover, Daimler, BMW Mini, Nissan and Toyota. But for the last 15 years it has focussed production with JLR, making sunroofs for the Range Rover ranges for the JLR plants in Solihull and Halewood in the UK and Nitra in Slovakia.
Mr Khan’s fears were echoed by Hodge Hill and Solihull North’s Labour MP Liam Byrne, who has described the cyber attack as a ‘digital siege’.
Byrne, chair of the Commons business and trade committee, said: “We fear if the government doesn’t step up soon, people will be laid off in their thousands.”
MP Ayoub Khan stands outside the Houses of Parliament in Westminster.(Image: Getty)
JLR said on Tuesday that factory production would not resume until 24 September at the earliest and apologised for the ongoing disruption. The hack happened more than two weeks ago and has forced the company to shut down computer systems and halt production.
Production lines were paused on 1 September, when the hack came to light. A criminal investigation is under way.
The shutdown is believed to be costing the firm £50m a week. It has factories in Solihull, Castle Bromwich and Halewood, an engine facility in Wolverhampton, and plants overseas.
JLR said it had delayed restarting production as “forensic investigation” of the cyber incident continued and it considered a “controlled restart” of global operations.
The Unite union has claimed JLR supply chain workers laid off with reduced or no pay are being advised to apply for universal credit. Unite said staff were being laid off with “reduced or zero pay”.
Unite has called for the UK government to set up a furlough scheme, similar to the one announced by the Scottish government for bus maker Alexander Dennis.
The firm’s supply chain supports 104,000 jobs in the UK, with many suppliers dependent on the carmaker as their main customer, like Webasto.
Byrne said he had written to the Chancellor to request Covid-style emergency help for suppliers. “This is not a mere flicker on the screen at Jaguar Land Rover, this is a digital siege and it’s sent a cyber shockwave through their supply chain,” he said.
“We think this is an attack which is much, much worse than the attack that took down Marks and Spencer.”
He said, with more of these types of attacks happening, the government needed to act as a backstop to a “different insurance system” to help firms which was not currently in place.
West Midlands Mayor Richard Parker said the attack was having a massive impact on JLR and the supply chain. He said he wanted to reassure people he was talking to the business secretary, the chancellor, JLR, and unions “and we have good understanding of the issues which need to be resolved”.
He added the firm was working with the government, “collating and collecting” the impact of the shut down on businesses across the supply chain, and to develop “best approaches about intervening to help them over the next few weeks and months”.
Firms in the automotive supply chain are often hard hit by disruptions on this scale because of the ‘just in time’ model used, which means parts are not stockpiled in readiness for use, but created and delivered to order. This saves storage and degradation costs.