Jaguar Land Rover to suspend work at UK plants amid computer chip shortage

Jaguar Land Rover to suspend work at UK plants amid computer chip shortage

Jaguar Land Rover (JLR) is to temporarily shut down production at two of its main UK factories because of a shortage of computer chips, in the latest sign of the difficulties facing the global car industry during the pandemic.

The company, which has the UK’s largest automotive manufacturing operation, confirmed to the Guardian it would have a “limited period of non-production” at its plants in Castle Bromwich in the West Midlands and Halewood on Merseyside starting on Monday.

It is understood the shutdown is scheduled to last at least a week, although the company will continue to monitor its chip supply before committing to a reopening date.

The shutdown underlines the struggles of carmakers across the world to secure a supply of computer chips, also known as semiconductors, amid a global shortage that has affected companies from Microsoft and Sony, the makers of the Xbox and PlayStation games consoles, to the phone manufacturer Samsung and cryptocurrency “miners” who need computer chips to solve puzzles that earn them bitcoin and other digital assets.

The automotive industry is used to running lean “just-in-time” supply chains that minimise the amount of cash tied up in factory warehouses. However, the global nature of the chip shortage has strained carmakers as they compete directly with tech companies for supply.

“The automotive industry doesn’t count for much in the semiconductors industry,” complained a source at another car manufacturer.

On Wednesday, the French carmaker Renault said the industry was at the peak of difficulties in securing chip supplies but warned disruption could continue for months over the summer.

JLR is still considering whether employees at the affected factories will be put on the government’s furlough scheme, which pays up to 80% of workers’ salaries if they are unable to work because of Covid-19. The scheme is set to run until the end of September.

The models affected by the temporary shutdown will be the Jaguar XE and XF executive cars and the F-Type sports car, all built at Castle Bromwich, and Halewood’s Discovery Sport and Range Rover Evoque.

Manufacturing will continue at JLR’s Solihull plant, which makes various Range Rover models plus the Jaguar F-Pace SUV. JLR’s international factories in Slovakia – where its new Defender is made – Brazil and China are as yet unaffected.

A JLR spokeswoman said: “Like other automotive manufacturers, we are currently experiencing some Covid-19 supply chain disruption, including the global availability of semiconductors, which is having an impact on our production schedules and our ability to meet global demand for some of our vehicles.

“We are working closely with affected suppliers to resolve the issues and minimise the impact on customer orders wherever possible.”