Many small firms reliant on Jaguar Land Rover have 'weeks left' before damage 'untenable'

Small firms reliant on the production-halted British car maker Jaguar Land Rover, "may have at best a week of cashflow left to support themselves" with "urgent" action needed to support businesses.

Liam Byrne, the head of the influential Business and Trade Committee of MPs, wrote to Chancellor Rachel Reeves with the warning after meeting with the car maker's suppliers. "Larger firms, we heard, may begin to seriously struggle within a fortnight - and many are simply unclear how they will pay payroll costs at the end of October," he said "In short, many firms have merely "weeks left" before the financial impact on them becomes untenable and causes critical damage to key elements of the automotive supply chain." Money latest: HMRC can now take money direct from your account if you don't pay Since 31 August, production has been halted across the car-making supply chain, with staff off work as a result of the attack.

More than 33,000 people work directly for JLR in the UK, many of them on assembly lines in the West Midlands, the largest of which is in Solihull, and a plant at Halewood on Merseyside. An estimated 200,000 more are employed by several hundred companies in the supply chain, who have faced business interruption with their largest client out of action.

A snap survey of 84 businesses across the West Midlands by local chambers of commerce found that 77% had experienced a negative impact as a result of the problems at JLR. Almost 45% described the scale as significant, with headwinds including lower revenue, increased costs and customer payment slowdowns.

Calls for government financial support had been growing, but Prime Minister Keir Starmer on Thursday afternoon said, "I haven't got an outcome here to give to you today". A partial restart It comes as JLR announced some of its IT systems are back online after being hit by a cyber attack late last month though production is still not expected to start again until 1 October at the earliest.

"The foundational work of our recovery programme is firmly underway," a company spokesperson said in a statement. As part of the partial restart, supplier payments can begin again.

"We have significantly increased IT processing capacity for invoicing," the statement said. "We are now working to clear the backlog of payments to our suppliers as quickly as we can." The supply of parts to customers across the world can also now recommence.

After a workaround was reached on Tuesday to allow cars to move to buyers without the usual online registration, the financial system to process wholesale vehicles is back online. "We are able to sell and register vehicles for our clients faster, delivering important cash flow.