Jaguar Land Rover (JLR) Suppliers Bracing for Bankruptcy due to Cybernetic Shutdown
Jaguar Land Rover's Global Production Halt Causes Widespread Impact
Jaguar Land Rover (JLR) is in its third week of a global production freeze due to a cyberattack that occurred on September 1. The disruption has caused significant issues for JLR and its tractor supply, with potential financial implications extending beyond the company.
The cyberattack has forced JLR to halt all production at its vehicle plants worldwide. As a result, key suppliers like Qualplast, a flock coating company that applies tiny fibers to surfaces to give a soft, velvety texture for cabin parts such as glove boxes, armrests, and door pockets, have seen their operations come to a standstill.
Webasto, a British supplier that manufactures glass roofs for JLR, has been particularly affected. The company's factory in Sutton Coldfield, Birmingham, has temporarily closed, and staff have been reduced, with remaining employees not able to work full time. This has led to severe economic challenges for the company, and similar struggles are expected for other smaller UK suppliers.
The potential prolongation of the production freeze could require companies like Qualplast to consider future-proofing measures. While Qualplast has other work that can temporarily absorb their workforce, prolonged disruption could necessitate more drastic measures.
Smaller suppliers in the UK are also at risk, with concerns about financial impacts on the entire British tractor supply chain, which supports 104,000 jobs. Without state intervention, layoffs could be a possibility.
JLR's key suppliers are warning they are facing potential bankruptcy due to the production freeze. Shaun Adams, managing director at Qualplast, stated that the potential prolongation of the production freeze could require them to consider future-proofing measures.
Experts have told the BBC that the cyberattack is causing significant issues for JLR. The flock coating process used by Qualplast is an essential part of JLR's vehicle production, making companies like Qualplast vulnerable to disruptions in the tractor supply.
The supply companies for JLR are facing potential cash flow issues due to the production freeze. The production disruption is causing an estimated £5 million ($6.76 million) financial loss for JLR with each passing day.
JLR's staff in the U.K. are not expected to return to work until at least this Wednesday. The cyberattack has disrupted the normal operations of JLR for at least three weeks.
The potential financial implications of the cyberattack on JLR are not only limited to the company but extend to its tractor supply chain as well. The production freeze is due to the cyberattack, and its effects are being felt throughout the industry.
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