Some businesses within the Jaguar Land Rover (JLR) supply chain are reportedly facing severe financial challenges, with some having as little as seven to ten days of cash left, according to a Labour MP. Ten suppliers expressed their concerns regarding unpaid invoices during a meeting with the government’s Business and Trade Committee. Sarah Edwards, the MP for Tamworth, indicated that several suppliers had not received payments since late August, raising significant worries about their financial viability.
JLR operates manufacturing plants in Solihull, Wolverhampton, and Merseyside, employing approximately 30,000 workers directly, with around 100,000 additional jobs associated with the supply chain. Edwards mentioned that the companies at the meeting represented a “cross-section” of first-tier suppliers. She emphasized the urgency of these suppliers receiving payments promptly to relieve their cash flow issues.
Furthermore, she detailed the plight of smaller suppliers, with one reportedly having to sell equipment and downsize their operations. The uncertainty surrounding JLR’s timelines for production recovery has left suppliers unable to effectively plan and at a heightened risk of operational failure.
JLR announced a “phased restart” of its IT systems and operations, which might alleviate some pressure on the supply chain. Edwards noted that the meeting included discussions on potential government interventions to provide support, such as the government purchasing components directly from suppliers to keep their businesses afloat until JLR resumes full production. However, she acknowledged that logistical issues could complicate this proposal.
The importance of clarity and timely communication from JLR was stressed, as suppliers require more information to navigate this challenging period. While the situation remains critical for many within the supply chain, the ongoing discussions aim to explore viable solutions.
Source: https://www.bbc.com/news/articles/c62zwz0k5dgo?at_medium=RSS&at_campaign=rss