Jaguar Land Rover (JLR) has secured a £1.5 billion taxpayer-backed loan guarantee after a crippling cyberattack left Britain’s largest carmaker unable to produce vehicles for nearly a month.
The government-backed scheme, announced by Business Secretary Peter Kyle, will enable JLR to access private financing quickly in order to keep its vast supply chain afloat until Christmas. JLR, owned by India’s Tata Motors, normally manufactures around 1,000 vehicles daily across its three UK sites, but production has been at a standstill since hackers breached its IT systems in late August.
Kyle described the incident as “an assault on an iconic British brand, but also on our world-leading automotive sector and the livelihoods that depend on it.” He said the loan guarantee would safeguard 34,000 JLR jobs in the UK as well as 120,000 roles across its supplier network in the West Midlands, Merseyside and beyond.
Chancellor Rachel Reeves echoed the sentiment, calling JLR “a jewel in the crown of our economy” and stressing the importance of protecting jobs.
The freeze in production has hit suppliers hardest. Many small and medium-sized firms rely almost entirely on JLR contracts, with some telling ministers they needed £1.5 billion of support to avoid collapse before Christmas. The Wolverhampton engine plant is expected to reopen in early October, but insiders warn that full production may not resume until the end of the year.
The government scheme does not provide JLR with direct cash but instead offers banks reassurance that 80% of loans will be repaid even if the company defaults. Similar guarantees were used during the Covid-19 pandemic, with Ford receiving a £1 billion package last year to support its UK electric vehicle programme.
Industry leaders say the measure will buy JLR valuable time, though critics argue Tata Group, JLR’s multibillion-dollar parent company, could have raised the funds without state backing. Ministers maintain that speed was crucial to prevent supplier collapse.
Shadow Business Secretary Andrew Griffith welcomed the intervention but accused the government of being too slow to act. He also called for the creation of a “cyber reinsurance scheme” to protect British businesses from increasingly sophisticated cyberattacks.
The JLR breach is part of a wider wave of hacks targeting UK industry. The Co-op recently revealed losses of £80 million from a similar attack, while retailers such as Marks & Spencer and Harrods have also reported incidents.
For JLR, the crisis adds to existing challenges, including declining profits, falling sales, and delays to its electric vehicle programme. While the loan guarantee provides temporary relief, analysts warn that the company’s path to recovery will be long and uncertain.
