Tata-owned Jaguar Land Rover pushes to pay struggling suppliers after hack

Jaguar Land Rover Automotive Plc is trying to clear a backlog of payments owed to suppliers to ease a crisis caused by a cyberattack that’s brought the carmaker’s factories to a standstill, according to people familiar with the matter.

The British automaker’s systems were brought down by the hack, leaving it struggling to pay suppliers — many of which are small manufacturers reliant on JLR’s business. In recent days, JLR has paid roughly £300 million ($405 million) to partners and aims to clear the backlog by the end of the month, one of the people said, asking not to be identified discussing confidential information.

Also Read: Tata-owned Jaguar Land Rover extends production halt again after Sept 2 cyberattack

The Range Rover maker has been prioritizing compensating suppliers under the most pressure, with some having paused their own production and sent workers home. The manufacturer has deployed around 50 staff to help process payments manually in recent days, with the regular systems down, one person said.

The carmaker is making the payments to ensure suppliers have liquidity and can retain workers so that they’re able to ramp production back up quickly when JLR resumes output, the people said. There are concerns that other automakers could suffer if suppliers collapse as a result of the cyberattack.

“Our focus remains on supporting our customers, suppliers, colleagues, and our retailers who remain open,” a JLR spokesperson said. “We fully recognize this is a difficult time for all connected with JLR and we thank everyone for their continued support and patience.”

JLR, which is owned by India’s Tata Motors Ltd., is grappling with the fallout from the cyberattack that has derailed its operations for more than three weeks. On Tuesday, it extended a production shutdown that’s affected sites from the UK to India until at least Oct. 1.

Suppliers are struggling to cope. Germany’s Eberspächer Gruppe GmbH & Co., which manufactures exhaust systems for JLR, and Slovakia’s Hollen, which ensures the quality of car parts, are among those affected, Bloomberg has reported. JLR previously said some data may have been compromised in the hack.

UK Business Secretary Peter Kyle met Tuesday with executives from JLR and its partners to discuss potential support. Union leaders have called for financial aid for smaller British companies, though so far the government hasn’t announced such measures.