Tata Motors Jaguar Land Rover begins phased restart after cyber-attack

London, Oct 7 (PTI) Tata Motors-owned Jaguar Land Rover (JLR) on Tuesday confirmed the phased restart of its operations after a devastating cyber-attack brought its factories to a grinding halt entirely last month.

The luxury carmaker also announced a new financing solution to support the cashflow of qualifying JLR suppliers, many of them small and medium enterprises (SMEs) struggling through the forced production shutdown.

“JLR today announces the latest steps in the phased restart of its operations and the agreement of a new financing solution to support the cashflow of qualifying JLR suppliers, as the business returns to the manufacture of its world class vehicles after a cyber incident in early September,” JLR said in a statement.

The phased restart of the company’s manufacturing operations will begin from Wednesday at the Electric Propulsion Manufacturing Centre (EPMC), where JLR builds engines, and its Battery Assembly Centre (BAC), both in the West Midlands region of England.

“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 (LOC), which feeds parts to JLR's global manufacturing sites,” the company said.

Vehicle manufacturing at Nitra in Slovakia and the restart of the Range Rover and Range Rover Sport production lines in the Solihull facility in the UK are set to follow later this week.

“Further updates on the next steps of the controlled, phased restart will follow, including for JLR's Halewood plant on Merseyside,” the company added.

Since the hack of its online IT systems, JLR said it had introduced solutions to support its suppliers by establishing a dedicated supplier help desk and implementing a manual payment system to settle outstanding invoices.

Starting this week, it will be reestablishing automated supplier payment systems as it fast tracks a new financing scheme for cash up front offers to qualifying suppliers during the production restart phase.

“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,” said JLR CEO Adrian Mardell.

“We know there is much more to do but our recovery is firmly underway,” he said.

The company claims qualifying companies in its supply chain will be paid much faster than under their standard payment terms, aiding their cashflow constraints 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,” JLR said.

Backed up by its banking partner, the company said the “short term financing scheme” means qualifying JLR suppliers will receive a majority prepayment shortly after the point of order and a final payment on receipt of invoice.

JLR’s typical supplier payment terms are 60 days post invoice, with the scheme accelerating payments by as much as 120 days. The carmaker said it will reimburse the financing costs for those JLR suppliers who use the scheme during the restart phase, as the company returns to full production.

This move follows steps taken by JLR during September to “prudently bolster” its liquidity following the interruption to business since the cyber incident, said Britain’s largest car manufacturer and one of the country’s biggest exporters employing around 120,000 people.

Last week, the UK government stepped in with a loan guarantee of up to 1.5 billion pounds to support JLR's supply chain impacted by the extended production shutdown. PTI AK GSP GSP