CBM welcomes JLR’s staged return but warns of long road ahead for suppliers
The Confederation of British Metalforming (CBM) has welcomed Jaguar Land Rover (JLR)’s staged return to production.
The restart of Britain’s premier car brand includes the release of its own funding stream to support suppliers further down the supply chain.
Members from the organisation’s 200-strong base continue to flag serious concerns over liquidity caused by JLR shutting down operations following a cyberattack.
Stephen Morley, President of the CBM, said: “JLR is to be applauded for its hard work in getting funds in place and for producing a workable payment scheme that will provide a welcome boost to liquidity, certainly at the top tier of the supply chain.
“However, there are still some key issues, especially for tier 2, 3 and 4 firms. Firstly, an understanding of what a ‘qualified’ supplier means is paramount and, secondly, there is a reliance on the goodwill of the tier one suppliers to pass the payments down.
“In some cases, we know this hasn’t happened, albeit some of them might not be in a position to do so through no fault of their own.”
Minister rallying support from banks
Chris McDonald MP, the Minister for Industry, has confirmed he has brought all the major banks requesting their support for the supply chain.
Stephen said: “The CBM is indebted to the Minister for his intervention with the banks. We are now urging all JLR suppliers to speak to their banks, to see what support they can give right now.
“I appreciate this might not be a comfortable route for some, but we must look at every avenue whilst we work together with HM Treasury on more long-term support options.”
CBM argues the price of saving good companies is a lot cheaper than losing them.
Stephen added: “There are wider issues to consider. If immediate liquidity concerns are alleviated, how does this unwind in the future as this will have had a material impact on cash flow, long-term liquidity and profits?
“We also need to factor in supplier’s arrangements and relationships with their existing lenders as it could impact security and access to other facilities. These are issues for further down the road but could prevent long-term growth for the automotive supply chain and UK manufacturing as a whole.”
