Jaguar Land Rover (JLR) will temporarily close production at two of its major UK factories due to a shortage of computer chips, the latest indication 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 that it would have a “limited period of non-production” at its Castle Bromwich plant in the West Midlands and Halewood on Merseyside starting on Monday.
It is understood that the shutdown will last at least a week, although the company will continue to monitor its chip supply before committing to a reopening date.
The shutdown underscores the struggles of car makers worldwide to secure a supply of computer chips, also known as semiconductors, amid a global shortage that has affected companies from Microsoft and Sony, makers of Xbox gaming consoles and PlayStation, for the phone maker. Samsung “miners” and cryptocurrency that need computer chips to solve puzzles that earn them bitcoin and other digital assets.
The automotive industry is used to running tight “on time” supply chains that reduce the amount of cash tied up in factory warehouses. However, the global nature of the chip shortage has put a strain on car manufacturers as they compete directly with technology companies for supply.
“The motoring industry doesn’t account for much in the semiconductor industry,” a source at another car manufacturer complained.
On Wednesday, French car maker Renault said the industry was at its peak in securing chip supplies but warned that disruption could continue for months over the summer.
JLR is still considering whether workers in the affected factories will be put on a government hardship plan, which pays up to 80% of workers’ wages if they can’t work because of Covid-19. The scheme is expected to run until the end of September.
The models affected by the temporary closures will be Jaguar XE and XF active cars and the Type-F sports car, all built at Castle Bromwich, and Discovery Sport and Range Rover Evoque by Halewood.
Manufacturing will continue at the Solihull JLR factory, which makes various Range Rover models along with Jaguar F-Pace SUV. JLR’s international factories in Slovakia – where its new Protector is made – Brazil and China are not affected yet.
A spokesman for JLR said: “Like other automotive manufacturers, we are currently experiencing some disruption in the Covid-19 supply chain, including the global availability of semiconductors, which is affecting our production schedules and able to meet the global demand for some of our vehicles.
“We are working closely with affected suppliers to resolve the issues and minimize the impact on customer orders wherever possible.”