‘A step in the right direction’ – Chamber welcomes Government loan to help JLR suppliers

Business leaders in Greater Birmingham today welcomed a £1.5bn Government loan to support firms impact by the JLR cyber-attack – and called for “all options to be left on the table”.

The Government announced over the weekend that it will underwrite a £1.5bn loan guarantee to the automotive giant in a bid to support its suppliers as a cyber-attack continues to halt production.

It comes after a snap survey from the Greater Birmingham, Black Country and Coventry & Warwickshire Chambers of Commerce revealed the wider impact of the cyber-attack – with West Midlands firms reporting lost revenue and significant operational disruption.

Raj Kandola (pictured), acting deputy CEO at Greater Birmingham Chambers of Commerce, said: “We welcome the announcement made over the weekend that the Government is backing JLR with a huge loan, with the explicit intention to support those firms in the supply chain that have been hugely impacted by the cyber-attack.

“Snap polling conducted last week by the Chambers across the WMCA area underlined the substantial challenges these firms were facing – namely a massive drop in revenue, huge cost pressures and significant operational disruption.

“Ultimately, it’s a step in the right direction. The challenge will now be to effectively identify those lower down in the supply chain and getting liquidity into the system as quickly as possible.

“As a Chamber, we stand ready to work with the mayor and other key regional partners to support those businesses in distress and ensure all options are kept on the table in the coming days.”

Eighty-four businesses, representing nearly 30,000 employees in the West Midlands, were consulted in the Chambers’ survey.

Of the firms surveyed, 77 per cent said the cyber-attack has had a negative impact on their business, with 44 per cent describing the impact as ‘significant’.

And 45 per cent reported a negative financial impact - including loss of revenue, increased costs and a slowdown in customer payment slow down.

A further 33 per cent reported operational disruption, such as delays and system downtime, while 26 per cent said the attack has caused disruption to the supply chain, including delays with goods and services.

More than half (57 per cent) called for financial support – in the form of grants, compensation and access to credit – to negate the impact.

Eighteen per cent called for specific protection from exposure under the Insolvency Act until the crisis ends.

Businesses have adopted a number of measures to mitigate the impact of the cyber-attack – including reducing staff hours (35 per cent), seeking additional financial advice (17 per cent) and strengthening their own cyber security procedures (35 per cent).