Jaguar Land Rover (JLR) has been rescued with a £1.5bn government-backed loan after it stopped manufacturing following a cyber attack.
The cash injection will allow JLR to support its supply chain after firms warned of mass layoffs and collapse following the halt to production.
Rachel Reeves, the Chancellor, said: “Jaguar Land Rover is an iconic British company which employs tens of thousands of people – a jewel in the crown of our economy.
“Today we are protecting thousands of those jobs with up to £1.5bn in additional private finance, helping them support their supply chain and protect a vital part of the British car industry.”
Peter Kyle, the Business Secretary, who met with representatives of JLR and suppliers last week, said: “Following our decisive action, this loan guarantee will help support the supply chain and protect skilled jobs in the West Midlands, Merseyside and throughout the UK.”
The manufacturer, which is capable of producing 450,000 cars a year, was forced to cease global production after a cyber attack at the end of August. Systems which managed spare parts and payments were also compromised.
The loan – which has been given by a bank – will be repaid over five years, and is backed by a guarantee provided by UK Export Finance. The mechanism was used in July to provide £1bn for car manufacturer Ford, and typically covers 80pc of a loan, but does not require taxpayers’ funds up front.
The Telegraph understands that in the worst possible case, the Government would be on the hook for £1.2bn.
Unions, businesses and JLR’s suppliers had called for a moratorium on payments to HMRC, as well as a furlough-style support system for staff unable to work.
There have been some first signs of recovery at the embattled manufacturer. Staff have been told that they could be back at work as soon as Oct 1, with reports suggesting that production could begin as soon as Oct 6, according to The Times.
Suppliers were told on Thursday that JLR’s global parts logistics centre would reopen as soon as Monday to help repair broken down Range Rovers, as part of a “phased recovery”.
Senior management has worked seven-day weeks throughout the crisis, a source at JLR said.
Teams across the UK and in India worked weekend shifts in order to manually process payments to keep JLR suppliers afloat.
A “warehouse within a warehouse” the size of 40 football pitches has been built at a facility in Leicestershire to allow access to 290,000 parts to workers with trolleys and worksheets.
A customer relations team uploaded 4,000 vehicle identification numbers in a single evening to ensure that customers were delivered the right cars.
