JLR didn’t have cyber attack insurance; UK considers providing financial help
The United Kingdom is considering providing financial support to Jaguar Land Rover’s suppliers after the automaker suspended production due to a cyber attack.
After nearly a month of being shut down, the company and its supply chain have been at a standstill. The Telegraph reports that JLR has been rescued with a £1.5 billion ($2 billion) government-backed loan. On Monday, Automotive News Europe reported that JLR is seeking a £2 billion ($2.7 billion) loan from global banks, in addition to the loan from the UK government.
The company’s financial burden is likely heavier with what appears to be a lapse in insurance that could’ve covered the attack.
Reuters first reported that the company failed to finalize a cyber insurance deal brokered by Lockton before the attack and that it appears this left the company uninsured. Reuters said it received the information from three senior cyber insurance market sources.
The article estimates that JLR is losing nearly $68 million a week, with about 33,000 employees staying at home.
“Fears are growing that some suppliers, in particular the smaller firms who solely rely on JLR’s business, could go bust without support,” the BBC says. “One idea being explored is the government buying the component parts the suppliers build. Suppliers have told the BBC they are sceptical about the success of such a scheme.”
JLR announced Friday that it was doing a phased restart of its operations. This included bringing back sections of its digital estate.
A notification said the company had increased its IT processing capacity for invoicing and was working to clear the backlog of payments to suppliers.
The Global Parts Logistics Center, which supplies parts for retailer partners in the UK and around the world, was returning to full operations. It said this enables retail partners to continue servicing clients’ vehicles and keeps customers mobile.
It added that the financial system used to process the wholesale of vehicles was brought back online, allowing the company to sell and register them at a faster pace for clients, delivering important cash flow.
Earlier last week, JLR announced it was extending its current production pause until Oct. 1. It originally announced production would resume Sept. 24.
The Telegraph reported soon after the shutdown that repairers across JLR’s franchised dealership network, as well as independent dealers, were facing difficulties when using the company’s diagnostic systems and electronic parts catalog.
It reported that the systems were also down, making it difficult to complete repairs on Range Rover Discovery and Defender vehicles, as well as Jaguar sports cars.
“It means drivers who need urgent work face an uncertain wait, with the disruption also likely to create knock-on delays even when the crisis has been resolved,” the article says.
Paul Myers, of Land Rover parts supplier Britpart, told The Telegraph that the cyber attack had essentially halted global shipments of JLR parts, with the company unable to send or receive orders.
“We’ve still got substantial stocks of parts and we can distribute with our own transport network, but it is restricting the ability of workshops to fix the cars,” he said in the article. I’ve spoken to an awful lot of our customers and everybody’s frustrated — not with Land Rover, but with the clowns behind this attack.”
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