Jaguar Land Rover (JLR) is preparing to inject up to £500 million into its supply chain to prevent a wave of insolvencies among parts makers after a cyberattack brought production to a standstill and left thousands of UK suppliers struggling for cash.
The initiative, expected to be finalised within days, will see JLR lend directly to its first-tier suppliers through an invoice financing facility, providing immediate cashflow relief as the carmaker begins to restart operations.
The plan comes as a taxpayer-backed £1.5 billion rescue guarantee announced by ministers last weekend remains unsigned, despite being billed as a lifeline for the UK’s biggest car manufacturer. Sources close to the talks said the state-supported financing deal has yet to be approved, leaving suppliers uncertain when or if funds will flow.
JLR, which employs 34,000 people and supports around 120,000 more across its UK supply chain, has been battling to restore production following a hacking incident in early September that crippled its IT systems and halted manufacturing globally.
The government’s proposed £1.5bn facility was announced by Business Secretary Peter Kyle and Chancellor Rachel Reeves to help JLR secure short-term liquidity from commercial lenders. Reeves described it as a measure to “protect thousands of jobs,” while Kyle said it showed Labour “standing by British manufacturing.”
However, multiple sources confirmed the deal had not yet been signed, and business leaders in the Midlands have warned of a mounting crisis among suppliers.
In a letter sent to industry minister Chris McDonald over the weekend, the heads of the Greater Birmingham, Coventry & Warwickshire, and Black Country Chambers of Commerce said many firms were “running out of cash and have no guarantee of future sales.”
They urged ministers to avoid a repeat of the Carillion (2018) and MG Rover (2005) collapses, which devastated the Midlands supply base. “If the situation worsens and the loan guarantee doesn’t flow to suppliers, further measures may be necessary,” the letter warned.
How JLR’s private rescue plan will work
Under the proposed JLR facility, suppliers will be able to submit invoices for immediate payment, rather than waiting weeks for standard remittance. The scheme will initially apply to tier-one suppliers that transact directly with JLR, with the expectation that they pass on liquidity to smaller tier-two and tier-three firms further down the chain.
The initiative, which sources described as “radical but necessary,” aims to restore stability across JLR’s supply network and prevent bottlenecks as production resumes. A phased restart of manufacturing is due to begin Monday, although insiders said the carmaker is unlikely to be fully operational again until Christmas.
It remains unclear whether the £500m facility will be restricted to UK suppliers or also extended to JLR’s overseas partners, which account for around half of its parts sourcing.
The new financing programme could provide “a game-changer moment for suppliers,” one source familiar with the talks said. “This is the difference between life and death for some firms in the supply chain. Many have been operating hand-to-mouth since the cyberattack.”
While the details are still being finalised, industry insiders said the initiative could be launched as early as next week, depending on the pace of approvals and supplier readiness.
Separate £2bn bank deal boosts JLR cash reserves
In a further move to strengthen its finances, JLR has secured a £2 billion funding facility from Standard Chartered, Citigroup, and Mitsubishi UFJ Financial Group. The deal provides the company with additional liquidity to support recovery and rebuild cash buffers.
Although JLR declined to comment, analysts said the decision to self-finance supplier support underlines the carmaker’s determination to stabilise its network as the government’s rescue stalls.
The crisis underscores the fragility of the UK automotive supply chain, heavily reliant on just-in-time manufacturing and tight margins. Industry leaders have warned that even a few weeks of disruption can cause irreversible damage to smaller firms.
If JLR’s self-funded rescue goes ahead, it would represent one of the largest privately financed supply-chain bailouts in UK industry — and a crucial test of Britain’s industrial policy under Labour.
With production still constrained and state guarantees delayed, JLR’s intervention may prove pivotal in keeping the wheels of British manufacturing turning.
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JLR steps in with £500m supplier lifeline amid stalled state support