Jaguar Land Rover (JLR) has announced efforts to help its supply chain and a partial restart of operations following August’s crippling cyber attack.
The company said “qualifying” supplier companies would be eligible for early payments due to the disruption caused by the temporary shutdown of its factories over a month ago.
At the same time, it said the phased restart of its manufacturing sites would begin at its Electric Propulsion Manufacturing Centre and its Battery Assembly Centre in the West Midlands from Wednesday.
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“JLR colleagues will also begin to return on Wednesday to the company’s stamping operations in Castle Bromwich, Halewood and Solihull, UK, and other key areas of its Solihull vehicle production plant, such as its body shop, paint shop and its Logistics Operations Centre, which feeds parts to JLR’s global manufacturing sites.” a statement said.
The prospect of production staff getting back to work will come as a huge relief to workers and suppliers alike. The shutdown is currently into its sixth week, costing JLR at least £5m a day.
Companies which supply JLR both directly and indirectly have suffered though the carmaker is understood to have met its financial commitments to all partners it deals with.
Firms further down the chain complained last week that they were yet to receive any support, despite the offer of a £1.5bn loan guarantee by the government.
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Inside factory affected by Jaguar Land Rover shutdown
JLR is believed to have not signed up to it on the grounds it has had sufficient funds to pay its way to date.
The new early payments scheme is only open to its main, so-called tier one, suppliers.
It is hoped that money will trickle down from them to their own customers who have, in many cases, laid off staff.
The carmaker said of the help now on offer to suppliers: “Qualifying JLR suppliers will be paid much faster than under their standard payment terms, aiding their cashflow in the near term.
“Following an initial phase with qualifying JLR suppliers critical to the restart of production, the scheme will be expanded, including to some non‑production suppliers.
“Working with a banking partner, this short‑term financing scheme means qualifying JLR suppliers will receive a majority prepayment shortly after the point of order and a final true‑up payment on receipt of invoice.
“JLR’s typical supplier payment terms are 60‑days post invoice, so this scheme accelerates payments by as much as 120 days. JLR will reimburse the financing costs for those JLR suppliers who use the scheme during the restart phase, as the company returns to full production.”
JLR said that the non-production suppliers who could be offered help later included the likes of caterers and consultants.
JLR chief executive, Adrian Mardell, said: “This week marks an important moment for JLR and all our stakeholders as we now restart our manufacturing operations following the cyber incident.
“From tomorrow, we will welcome back our colleagues at our engine production plant in Wolverhampton, shortly followed by our colleagues making our world-class cars at Nitra and Solihull.
“Our suppliers are central to our success, and today we are launching a new financing arrangement that will enable us to pay our suppliers early, using the strength of our balance sheet to support their cashflows.
“I would like to thank everyone connected to JLR for their commitment, hard work and endeavour in recent weeks to bring us to this moment. We know there is much more to do but our recovery is firmly underway.”
