Fear of JLR parts shortage if small suppliers fail

JLR has been unable to produce cars since a cyber-attack at the end of August

A former Jaguar Land Rover (JLR) engineer fears the firm could be left short of components if its smallest suppliers fail as a production shutdown is extended again.

JLR has been unable to produce cars since a cyber attack at the end of August, which forced it to shut down its IT networks.

The company has confirmed that its factories - including its UK facilities in Solihull, Halewood and Wolverhampton - will not resume operations until at least 1 October.

"I'm surprised by the cyber attack, but not by the catastrophic effect it has through the supplier base as we've seen similar effects during financial crashes", the former quality engineer told BBC Radio WM on Tuesday.

The worker, who was involved in the supply base for 34 years, said most of the big suppliers, known as tier one suppliers, could ride the storm, as they were large international companies, but those further down the line may not.

Giving the example of a dashboard, the engineer said it was made up of hundreds of components, which could be manufactured by up to 20 suppliers.

The tier one supplier made the dashboard, buying parts from tier two, who bought from tier three suppliers and so on, they explained.

But if a tier four supplier, which provided a £1 component, went bust as it was reliant on income from JLR, when production started up again "you've suddenly got to find someone who can make this component", he explained.

That was not easy, as suppliers needed to be prepared for large orders, and follow JLR's quality procedures, which takes time.

It could mean having to fit small parts after the car had been built, which comes with "quality and damage risks," said the engineer.

'A lot of bailing out'

The business secretary and industry minister visited the West Midlands on Tuesday, for the first time since the cyber attack, to meet JLR and firms in its supply chain.

JLR's UK plants employ about 30,000 people directly, with a further 100,000 working in the firm's supply chain and 60,000 who rely on the spending of these workers.

The former employee said that previously in financial crashes, JLR had to bail out suppliers, "which I suspect will happen, but if 10, 20 suppliers go bump, that's a lot of bailing out."

Firms affected include Landflight Travel Services, which usually provides a shuttle bus service three times a day for JLR employees travelling to the Solihull factory.

Trevor Baker, who works at Landflight, said the services had stopped during the shutdown, which meant the company was losing £2,000 a day.

"We're still having to pay the drivers for their time. Obviously, the vehicles aren't in use and we're losing out on the revenue," he told BBC Midlands Today.

He said the company needed to know exactly how long the closure be so they could "plan towards it".

Chris Hammett, of auto parts store MM 4X4, based in Droitwich, Worcester, usually buys parts from JLR to sell to customers.

He said the shop had been getting parts from export companies during the shutdown but did not know how long stocks would last.

"Everything is drying up now and it's causing a bit of a problem," he said.

"You're getting people who want certain parts from Land Rover and it's not going to happen so their vehicles can't get fixed.

"What can they do? Sometimes they take their frustration out on you when they're on the telephone."

In a statement confirming the shutdown extension, JLR said: "Our focus remains on supporting our customers, suppliers, colleagues, and our retailers who remain open.

"We fully recognise this is a difficult time for all connected with JLR and we thank everyone for their continued support and patience."

West Midlands Mayor Richard Parker said the government was yet to have a formal discussion on whether it will step in to help

West Midlands Mayor Richard Parker said he was working closely with the government to understand the severity of the situation.

"The impact of the shutdown has had a very deep in many parts of the supply chain," he told the BBC.

"We're asking JLR to work with the government to collate information on the supply chain on the severity of the impact on them and how critical the situation is.

"Once we have more information of that, I will be working with the government, JLR and the supply chain to work out the best way we can support them."

Speaking on whether the government would step in with financial help, he said a formal discussion has not yet taken place.

"The situation is critical. But if government is going to respond, we need to have more information on the depth and breadth of the issue across the whole supply chain," he continued.

"That information currently isn't available, but will be very soon."

MP Chris McDonald said the government was already providing "intensive" support to JLR.

He said: "The first and most important thing we've done we've brought in experts from the cyber security centre and the national crime agency into JLR and they're working closely with jaguars teams to try and resolve the issues.

"My attention has now turned to the supply chain. I used to run a small business in a supply chain so I have a pretty good understanding of how this works and its really important we don't impose solutions on businesses - we work with them."