JLR posts heavy losses as production returns to normal after cyber hack
Jaguar Land Rover has posted deep losses after the cyber attack that downed its global vehicle production for five weeks became ‘the single most financially damaging’ incident of its kind to ever hit Britain.
The UK’s largest car maker revealed that its annual profits are set to be wiped out after the hack in August halted assembly lines in the UK, Slovakia, Brazil and India.
It said production has now returned to normal as it shared losses of £485million for the three months to September 30, compared to a profit of £398million a year earlier.
This was due to costs of £196million related to the cyber attack and costs relating to job cuts.
Sales for the three months fell 24 per cent to £4.9billion.
Departing chief executive Adrian Mardell – who will be replaced by new boss PB Balaji next week – said: ‘JLR has made strong progress in recovering its operations safely and at pace following the cyber incident.’
There have also been far-reaching economic side effects, as the attack was this week revealed to have pushed down GDP by 0.17 percentage points in September.
‘Single most financially damaging’ incident of its kind: Jaguar Land Rover posts heavy losses as production returns to normal after cyber hack
JLR was forced to suspend production across all vehicle plants in the UK – as well as overseas – throughout September after shutting down its IT systems to mitigate the impact a cyber breach carried out by hackers on August 30
The first JLR workers returned to factory floors only on October 7 as part of a ‘phased restart’ to production
JLR was forced to suspend production across all vehicle plants in the UK – as well as overseas – throughout September after shutting down its IT systems to mitigate the impact a cyber breach carried out by hackers on August 30.
JLR assembly lines were downed on September 1 and the first workers returned to factory floors only on October 7 as part of a ‘phased restart’ to full production.
Industry figures showed the dramatic impact JLR’s production suspension had on the nation’s passenger car outputs during the month of September, which plunged by 27.1 per cent.
With the shortfall almost entirely JLR products with an average sale price of £70,000, the estimated value loss was around £1.33billion.
Mike Hawes, chief executive at the Society of Motor Manufacturers and Traders said in October that JLR’s unscheduled production stoppage had put the sector under ‘immense pressure’.
It affected over 5,000 organisations, and is estimated to have cost at least £1.9billion, according to the Cyber Monitoring Centre’s (CMC) analysis.
On September 28, the Government stepped in with a £1.5billion loan guarantee to support its supply chain to keep smaller businesses tied to JLR output afloat until the car maker fully restarted its assembly lines.