Jaguar Land Rover Suppliers Face Bankruptcy Amid Cyber Attack Crisis
LONDON (Reuters) - The global automotive industry is bracing for a potential ripple effect from the ongoing cyber attack crisis at Jaguar Land Rover (JLR), with some suppliers facing bankruptcy and widespread job losses.
The British carmaker, which has been forced to shut down its computer systems and production lines worldwide since September 1, is estimated to have lost at least $65 million in revenue. However, experts warn that the most significant damage may be inflicted on JLR's network of small and medium-sized suppliers, who are struggling to stay afloat.
"It's a perfect storm for these companies," said David Bailey, professor of business economics at Birmingham Business School. "They're already under pressure from Brexit uncertainty and now this cyber attack has pushed them over the edge."
JLR's suppliers, many of whom are based in the UK, employ around 250,000 people across the supply chain. If the stoppage continues, experts predict that up to a quarter of these companies could go bankrupt, resulting in significant job losses.
The British government is facing calls to establish a furlough scheme to support affected suppliers and prevent widespread layoffs. "This is not just an issue for JLR, but also for the entire automotive industry," said a spokesperson for the UK's Department for Business, Energy & Industrial Strategy.
In a statement, JLR acknowledged the challenges faced by its suppliers and pledged to work closely with them to mitigate the impact of the cyber attack. The company has yet to announce when production will resume at its factories in Solihull, Halewood, and Wolverhampton.
The global automotive industry is watching the crisis unfold with concern, as it highlights the vulnerability of complex supply chains to cyber threats. "This incident serves as a wake-up call for companies to prioritize cybersecurity and invest in robust protection measures," said a spokesperson for the International Organization for Standardization (ISO).
As JLR continues to assess the damage and work towards resuming production, its suppliers remain on tenterhooks, waiting for news of when they can restart operations. The crisis has sparked renewed calls for greater investment in cybersecurity and supply chain resilience across the industry.
Background:
Jaguar Land Rover is one of the UK's largest automotive manufacturers, with a global presence and a network of over 1,000 suppliers worldwide. The company's reliance on complex computer systems and interconnected supply chains makes it vulnerable to cyber threats.
Additional Perspectives:
Industry experts warn that the JLR crisis may be just the tip of the iceberg, as other companies in the automotive sector are also exposed to similar risks. "Cybersecurity is a growing concern for the entire industry," said a spokesperson for the Automotive Industry Action Group (AIAG).
The UK government has been criticized for its response to the crisis, with some lawmakers calling for greater support for affected suppliers and workers.
Current Status:
JLR's factories remain closed until at least Wednesday, as the company continues to assess the damage from the cyber attack. Suppliers are bracing themselves for potential bankruptcy and job losses, while industry experts warn of a broader impact on the global automotive sector.
Reuters' reporting is supported by the Reuters Foundation.
*Reporting by Bbc.*
