Government backs JLR with £1.5 billion loan guarantee

Business Secretary Peter Kyle announced yesterday (28 September) that the Government has agreed to support Jaguar Land Rover (JLR) with a guarantee expected to unlock up to £1.5 billion to give certainty to its supply chain following a recent cyberattack. The loan from a commercial bank, backed by the Export Development Guarantee (EDG) provided by export credit agency UK Export Finance (UKEF), will be paid back over five years and bolster JLR’s cash reserves so it can support its supply chain which has been greatly impacted by the shutdown.

Business and Trade Secretary Peter Kyle said: “This cyber-attack was not only an assault on an iconic British brand, but on our world-leading automotive sector and the men and women whose livelihoods depend on it. 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. We are backing our automotive sector for the long term through our modern Industrial Strategy and the landmark trade deals we have signed to boost exports, as part of our Plan for Change.

Chancellor of the Exchequer Rachel Reeves said: “JLR 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 £1.5 billion in additional private finance, helping them support their supply chain and protect a vital part of the British car industry.”

With plants in Solihull and Wolverhampton in the West Midlands, plus Halewood in Merseyside, JLR is one of the UK’s largest exporters and a major employer – with 34,000 people working directly in its UK operations. It also operates the largest supply chain in the UK automotive sector, much of it made up of SMEs, and employing around 120,000 people.

Vital support
This support follows a visit by the Business Secretary and Industry Minister to JLR’s Gaydon headquarters and JLR sunroof manufacturer Webasto last week to meet senior leaders, workers and supply chain members.

Mayor of the West Midlands Richard Parker said: “This support is vital to the West Midlands — it will keep people in work, protect the smaller firms that rely on JLR and give our region the stability it needs while production is paused. I will keep working hard with ministers and industry to safeguard jobs and make sure our world-class automotive sector comes through this stronger.”

The Government has been in daily contact with JLR and cyber experts to listen to concerns and what support can be provided to get production back online. The support follows several significant actions by the Government in recent months to back the UK’s automotive sector, including securing landmark trade deals with India and the US to turbocharge export opportunities for UK companies by slashing tariffs.

The Government also launched an Electric Car Grant to support the transition to zero-emission vehicles and incentivise sustainable manufacturing, and slashed industrial electricity costs for thousands of companies through the British Industrial Competitiveness Scheme, as part of the modern Industrial Strategy. The Strategy also committed £2 billion capital and R&D funding for the automotive sector to 2030, and an additional £500 million to extend the R&D support for the industry to 2035.

CBM welcomes announcement
Stephen Morley, president of the Confederation of British Metalforming (CBM), which looks after the interests of 200 companies focused on manufacturing fasteners, forgings, pressings and cold-rolled and sheet metal products, many of which are JLR suppliers, said: “The CBM welcomes the Government’s announcement to back JLR with a £1.5 billion guaranteed loan. This is the type of intervention that the CBM Taskforce, which has been supporting the car maker’s supply chain, has been requesting and we are pleased to see it come to fruition.

“We are urgently pressing for more details on the support and, importantly, how we make sure the finance cascades down the supply chain and gets to companies who are currently on a cliff edge with cash running out and jobs in the balance. If we can make sure this funding gets distributed quickly, we have a great opportunity to protect the UK automotive supply chain — however, speed is of the essence.

As it rolls out, we are asking CBM members to get in touch if they are finding it difficult to access or if it isn’t working for them — that way we can give feedback directly to the Government. We would like to thank the Minister for Industry Chris McDonald, MP Sarah Coombes and all other local politicians who have worked with us on the Taskforce, listened to our concerns and lobbied for the announcement we got yesterday. This isn’t about political point scoring, or which party has done what, this is all about keeping a truly iconic British manufacturing brand flying.”