Why JLR is getting a $2B loan from UK government
What's the story
The British government has announced a loan guarantee of £1.5 billion ($2 billion) for Tata-owned Jaguar Land Rover (JLR). The move comes after a month-long production halt due to a cyberattack that severely disrupted JLR's supply chain and endangered many jobs. The government's intervention is aimed at protecting the iconic British brand and its vital automotive industry while providing stability to affected suppliers.
Financial details
Loan guarantee to aid JLR's supply chain
The loan guarantee will be provided by a commercial bank and backed by UK Export Finance. The loan, to be repaid over five years, is expected to unlock £1.5 billion of support, aiding JLR's supply chain. The move comes after the cyberattack forced JLR to idle its plants in the UK, Slovakia, Brazil, and India earlier this month, disrupting the wider supply chain.
Industry disruption
Cyberattack idles JLR's plants, affects suppliers
The cyberattack has affected not just JLR but also its suppliers. Some small suppliers have said they have a week at most before they run out of cash. The British government is working to support these companies amid the ongoing crisis.
Job security
Loan guarantee aims to protect skilled jobs
JLR operates three factories that together produce around 1,000 cars per day. These facilities provide many jobs in the Birmingham area and Liverpool. However, a recent survey showed some firms are cutting staff hours or making redundancies due to the ongoing crisis. The British government hopes its loan guarantee will help stabilize these businesses and protect skilled jobs across the country.
Official statement
Business Minister condemns cyberattack
Business Minister Peter Kyle condemned the cyberattack as "not only an assault on an iconic British brand, but on our world-leading automotive sector." He emphasized that this loan guarantee will help support the supply chain and protect skilled jobs.