The Government will underwrite a £1.5 billion loan guarantee to Jaguar Land Rover (JLR) as it continues to face a shutdown following a mass cyber attack.
The British carmaker has been forced to suspend production at its UK factories for several weeks after being targeted by hackers.
The shutdown is expected to last until October 1 at the earliest, leaving the company’s suppliers in limbo.
The loan, from a commercial bank, is expected to give those suppliers some certainty amid the continued shutdown.
The Government will give its backing to the loan through the Export Development Guarantee (EDG), a financial support mechanism aimed at helping UK companies who sell their goods overseas.
It will be paid back over five years, and will help to bolster JLR’s cash reserves as it pays back companies in its supply chain, who have been majorly impacted by the shutdown.
Business Secretary Peter Kyle said: “This cyber attack was not only an assault on an iconic British brand, but on our world-leading automotive sector and the men and women whose livelihoods depend on it.
Jaguar Land Rover announced it would extend its pause in production until 1 October (Photo: Dave Thompson/PA Wire)“Following our decisive action, this loan guarantee will help support the supply chain and protect skilled jobs in the West Midlands, Merseyside and throughout the UK.
“We’re backing our automotive sector for the long term through our modern industrial strategy and the landmark trade deals we’ve signed to boost exports, as part of our Plan for Change.”
The UK’s largest carmaker, JLR was hit by a cyber attack on 31 August.
Unions and politicians have warned since that small suppliers producing parts for the car giant could collapse without urgent financial support.
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Kyle this week met workers and bosses at Webasto, which makes sunroofs for JLR.
The brand has the largest supply chain in the UK automotive sector, which employs around 120,000 people and is largely made up of small and medium-sized businesses.
In the aftermath of the attack, ministers have been in contact daily with JLR and cyber experts, as the company attempts to restart production.
Unite general secretary Sharon Graham meanwhile said the loan was “an important first step and demonstrates that the Government has listened to the concerns raised in meetings with Unite over recent days”.
She added: “This is exactly what the Government should be doing, taking action to protect jobs.
“The money provided must now be used to ensure job guarantees and to also protect skills and pay in JLR and its supply chain.”
Prime Minister Keir Starmer (left) and Britain’s Chancellor Rachel Reeves speak to workers during a visit to a Jaguar Land Rover car factory in Birmingham in April (Photo: Kirsty Wigglesworth/Pool/AFP)Shadow business secretary Andrew Griffith said: “It is welcome to see that the Jaguar Land Rover supply chain – an important capability in our country that creates and supports thousands of automotive jobs – is finally being supported by the Government with loan guarantees in precisely the way we suggested.
“Ministers have got to the right place but took too long to get there. Labour must also pick up our suggestion of a cyber reinsurance scheme to protect British businesses from state-backed actors in an increasingly dangerous world.
“Britain’s firms and manufacturers deserve a government that is not distracted by scandals and infighting and that understands business.”
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