Suppliers warn of collapse as JLR resumes after hack

Suppliers to Jaguar Land Rover warned they are about a week from collapse as the carmaker resumes production after a cyberattack that disrupted its IT systems last month. Britain’s largest car-maker said parts of its IT network are back online and that it has begun clearing a backlog of payments to suppliers, with its recovery programme proceeding in cooperation with cybersecurity specialists, the UK Government’s National Cyber Security Centre and law enforcement.

Liam Byrne, head of the Business and Trade Committee, said MPs heard from firms that have already cut staff and rely on declining cashflow with only a limited window to stay afloat. Suppliers told Byrne they have mere weeks left before the financial damage becomes untenable and could cause irreversible harm to the automotive supply chain. In a letter to Chancellor Rachel Reeves, Byrne urged immediate action to provide emergency cash via schemes co-financed between JLR and the government. He added that any Government support should, at least in part, come from JLR’s Indian owners, Tata, because it was their cyber security that failed. Byrne said the problem extended beyond JLR’s balance sheet to the smaller firms that feed into the production line. “Most” have laid off staff and let agency workers go as the disruption continues. The time to act is now, he wrote, as the cost of inaction would ripple through the supply chain.

The political and business response has been evolving. The Prime Minister declined to say whether the Government could directly buy parts typically used by JLR to keep small suppliers trading, while officials were reportedly weighing steps to keep firms in the supply chain afloat. Reports on Thursday suggested that ministries were considering measures to provide liquidity or other support to sustain suppliers during the recovery period. In an interview with ITV, Labour leader Sir Keir Starmer said he was “really concerned” for the car-maker and “equally concerned about the other businesses that feed into JLR.”

Meanwhile, JLR has signaled progress in its recovery efforts, describing the situation as evolving. A spokesperson said the “foundational work of our recovery programme is firmly under way,” adding that the initial steps involve coordination with cybersecurity specialists and public authorities to stabilise operations and address the backlog in payments to suppliers. The company has not disclosed the extent of the financial impact or the precise timeline for resuming full production, but acknowledged that the stoppage remains a concern for its supply chain partners. The hack, which affected IT systems across operations, prompted a suspension of factory output and forced many suppliers to adjust plans as orders and payments slowed.

Industry observers have warned that the near-term risk to the broader automotive ecosystem is not limited to JLR’s own facilities. With production partially paused and some suppliers already outlining payroll pressures, the ripple effects could complicate the UK’s careful post-pandemic recovery in manufacturing and exports. The government and manufacturers are closely monitoring the evolution of the situation, weighing liquidity options and potential reforms to procurement and cyber resilience that could cushion future shocks.

The broader question remains how quickly recovery can proceed and whether the supply chain can be stabilized without long-term pain for small and mid-sized firms. As JLR pursues restoration of services and payments, suppliers face a tight timetable to preserve operations, maintain payrolls, and support the continuity of services that keep production lines moving. Tata, the parent owner, has been cited in discussions about responsibilities and financial support, given that cyber security failures are at the heart of the disruption.

The government has signaled willingness to explore options to minimize disruption and support the industry while keeping to a cautious, accountable process. As the situation develops, industry groups and lawmakers will watch for any decisive policy moves that could help avert broader damage to the UK automotive sector. For now, JLR indicates progress in getting parts of its IT environment back online and to process payments, a crucial step to preventing a complete collapse of supplier credit lines during a protracted recovery.