Jonathan Dudley, head of manufacturing at Crowe UK, has issued a stark warning to smaller suppliers in Jaguar Land Rover’s (JLR) supply chain who continue to suffer financial strain following a serious cyber attack earlier this year.
While JLR’s Tier 1 suppliers have mostly resumed production—supported by payments funded directly by JLR without resorting to government-backed loans—many Tier 2, 3, and 4 suppliers remain vulnerable. These smaller businesses are facing critical cashflow problems as payments continue to trickle down the supply chain.
With JLR plants scheduled for a two-week closure over the Christmas period, Dudley cautions that these shutdowns could prove fatal for a number of small suppliers still awaiting overdue payments. The industrial energy costs and the burden of quarterly rent payments due this season compound the financial pressures.
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“Many businesses are hit by a double whammy: the Christmas downtime coupled with pressing expenses,” Dudley explained. “The coming weeks will reveal which suppliers have managed to survive the storm and which have not.”
Reports already indicate some companies contemplating insolvency and others withdrawing UK operations entirely. Global suppliers, in particular, are also deterred by the UK’s comparatively high industrial energy costs, making domestic manufacturing increasingly costly.
Dudley advises suppliers facing cashflow challenges to seek professional assistance promptly. “Options exist—new equity injection, alternative investments, and restructuring—but they require comprehensive evaluation to ensure sustainable, long-term recovery.”
Crowe UK, a leading audit, tax, advisory, and consulting firm, is available to support affected businesses through this difficult transition period.