UK to Guarantee $2 Billion Loan to Jaguar Land Rover

Source Credit : Reuters

Britain will back Jaguar Land Rover with a 1.5 billion pound ($2 billion) loan guarantee to help support its supply chain in the wake of the luxury carmaker's production shutdown following a cyberattack.

Jaguar Land Rover's shutdown has lasted nearly a month, and the government had been exploring options to support the company and its supply chain, with some small suppliers saying they had one week left at most before they ran out of cash.

The carmaker, which is owned by India's Tata Motors , has three factories that together produce about 1,000 cars per day, and sustain many jobs in the area around Birmingham, Britain's second biggest city, and the northern city of Liverpool. A survey on Friday showed that some firms were reducing staff hours or making redundancies.

Business minister Peter Kyle said the cyberattack was "not only an assault on an iconic British brand, but on our world-leading automotive sector."

"This loan guarantee will help support the supply chain and protect skilled jobs," he said.

The business ministry said the loan would be privately financed and guaranteed by Britain's export credit agency UK Export Finance, and was expected to unlock 1.5 billion pounds of support for the carmaker's supply chain.

The Labour government had been in talks to offer support to suppliers caught in the fallout of the hack, which forced some vendors to send staff home while others await payments from JLR. Britain’s largest carmaker employs 34,000 people in the UK, with a further 120,000 jobs in the country tied to its supply chain.

Providing relief to the automotive sector will help ease some pressure on Prime Minister Keir Starmer’s government, as his ruling Labour Party gathers in Liverpool starting Sunday for its annual conference.