Welsh workers face pre-Christmas loss of earnings following global cyber attack

Martin Shipton

Hundreds of workers in Wales could be facing a bleak Christmas because of a cyber attack on their employer that caused huge disruption.

The global attack on Jaguar Land Rover (JLR) plans led to layoffs at a factory in Llanelli where 350 are employed, as well as a loss of overtime that many rely on for luxuries, especially at the festive season.

The town’s Labour MS Lee Water raised the issue during First Minister’s Questions at the Senedd. He asked: “What representations has the Welsh Government made to the UK Government regarding the impact on the Welsh economy of the Jaguar Land Rover cyber attack?

Standby

First Minister Eluned Morgan responded: “The JLR cyber attack has hit Welsh suppliers and the people who work in those companies hard. We welcome the £1.5bn UK loan guarantee, but Welsh workers need to know when the money will land.

“Our teams are in daily contact with around 30 suppliers in Wales, and React and Working Wales [support services for workers whose employment is affected] are already on standby to support any workers affected. I’m really pleased to see that there does seem to be some movement on this this morning, with JLR announcing that the phased restart of JLR manufacturing operations will happen.”

Mr Waters probed further, stating: “In Llanelli, the Marelli factory, which is still known to many in the town as Morris Motors, has felt a significant impact. Agency workers have been laid off and staff have been told to stay home and work back the hours, which inevitably means there’ll be no overtime in the run-up to Christmas, which they rely on.

“The UK Government, as you say, has stepped in with a loan guarantee, but as the Financial Times pointed out yesterday, JLR have been reckless in not having cyber insurance in place, especially since the damaging attacks on Marks and Spencer and Co-op show what damage this can do to a business.

“JLR is owned by Tata, which, as the Financial Times points out, as such a large firm, should be able to deal with temporary shocks to their operations like this, and it certainly shouldn’t be the workforce who have to suffer. The Confederation of British Metalforming says it fears irreversible damage to the UK auto supply chain from the fallout from this cyber attack. The Welsh Government has relationships at a senior level of Tata and JLR. Would the First Minister make further representations to Tata, the parent company, to provide urgent support for downstream suppliers like Marelli in Llanelli? “

Monitor

Baroness Morgan said: “Just to be clear, our officials have been very much in contact with companies in Wales that are affected. We are continuing to monitor the impact on the supply chain companies, and that includes Marelli and Gestamp, both operating in Llanelli. They have a combined workforce of 360 people, but there’s also, as you say, the agency workers who are depending on this as well.

“I met with the Secretary of State for Business and Trade, Peter Kyle, last week and I know that the Cabinet Secretary for Economy [Rebecca Evans] has written to him asking for details about when the funding will come down. But you’re quite right—I think more pressure and more questions need to be asked of Tata as to why they hadn’t got a more robust system and a system that supported the downstream workers, as you suggest.”

Llanelli Labour councillor Shaun Greaney said: “Why is it the poor workers who always pay the price for ineptitude at a higher level? They should be compensated by JLR’s owners Tata – that’s my own view.

“The impact of this shutdown at JLR will be felt all over Wales and will send a cold and harsh financial shiver down the spines of struggling Welsh families trying to make ends meet in the run-up to Christmas as overtime becomes scarce.”

Solutions

A spokesperson for JLR said: “Since the cyber incident, JLR has introduced solutions to support its suppliers, including establishing a dedicated supplier help desk and implementing a manual payment system to settle outstanding invoices, and this week re‑establishing automated supplier payment systems.

“With the new scheme, qualifying JLR suppliers will be paid much faster than under their standard payment terms, aiding their cashflow in the near term. Following an initial phase with qualifying JLR suppliers critical to the restart of production, the scheme will be expanded, including to some non‑production suppliers.

“Working with a banking partner, this short‑term financing scheme means qualifying JLR suppliers will receive a majority prepayment shortly after the point of order and a final true‑up payment on receipt of invoice. JLR’s typical supplier payment terms are 60‑days post invoice, so this scheme accelerates payments by as much as 120 days. JLR will reimburse the financing costs for those JLR suppliers who use the scheme during the restart phase, as the company returns to full production.

“This move follows steps taken by JLR during September to prudently bolster its liquidity, following the interruption to business since the cyber incident.”