Small companies that supply parts for Jaguar Land Rover (JLR) are being asked by banks to provide personal guarantees, including family homes, as collateral for emergency loans. This request follows a significant cyber-attack on JLR, which halted production and left parts manufacturers without income for over a month. JLR, the largest automotive employer in the UK, is considering advance payments to primary suppliers to restart production but smaller suppliers report they face imminent collapse without immediate financial support.
Since the attack, JLR has not manufactured any vehicles, with recent announcements indicating that limited production may resume soon. The supply chain has felt severe strain, prompting the Confederation of British Metalforming (CBM) to warn that the entire automotive sector could suffer irreversible damage without government intervention. This situation could potentially threaten numerous jobs in an industry targeted for growth by the UK government.
Michael Beese, managing director of Genex UK, noted that banks are requiring personal guarantees on loans, leading to trepidation among suppliers. Some are refraining from seeking financial assistance due to concerns over legal responsibilities. The government’s recent announcement of a £1.5 billion loan guarantee for JLR, while under discussion, does not currently offer direct financial aid to smaller suppliers, raising questions about the timeliness and effectiveness of this support.
Concerns abound over the lengthy process for funds to reach lower-tier suppliers, who may experience delays of up to 60 days in payments. The CBM has reiterated the need for direct government support to quickly address the funding shortfalls experienced by second-tier and smaller suppliers.
In response to the ongoing crisis, options such as a growth guarantee scheme and potential tax bill freezes have been suggested. Small suppliers have also requested clearer communication from JLR regarding production timelines to better prepare for their operational future. The business department and British Business Bank did not provide immediate comments on the situation.
Source: https://www.theguardian.com/business/2025/oct/01/jaguar-land-rover-suppliers-asked-to-put-up-homes-as-loan-security-after-hack