Jaguar Land Rover Can’t Build, Sell, Or Even Service Cars During Ongoing Cyberdisaster

It’s been a tough year for Jaguar Land Rover, with the Tata-owned company facing lower profits, higher tariffs, and a blowback to its new design direction. You can now add to that a cyberattack that’s completely crippled the company. Dealers, factories, and even independent shops in Tasmania are impacted.

I prefer to end Fridays at The Morning Dump with cheery news, but things are a bit mixed lately. Hyundai’s big expansion in America has also been severely disrupted, but this time because of a huge immigration raid that has led to the arrest of hundreds of people.

President Trump has signed an order to lower tariffs on Japanese cars. Expect car prices to still go up as suppliers are facing higher costs they plan to pass on to automakers, which will eventually pass those cost increases on to you.

Here’s some good news if you’re Mary Barra. She’s cashing out a bunch of GM stock and will bring home around $53 million before taxes.

JLR Gets Pwned

Jaguar Land Rover was a victim this week of a massive cyberattack, and not since the CDK Global ransomware incident has a cybersecurity incident so absolutely decimated a company in the automotive realm. The CDK incident was a dealership-level event. The JLR attack is even broader in scope, shutting down almost every facet of the company for days.

It’s bad. It’s real bad. The group of hackers appears to be made up of English-speaking teenagers–the most notoriously difficult group of people to bargain with. That’s extra embarrassing for the company, given that Tata-owned JLR announced a big deal with Tata Consultancy Services for its cybersecurity. Oops.

Everything about this is rough for JLR, which has had to either slow or completely pause basically everything a car company has to do at every level. Production? JLR sent workers at its Merseyside and Solihull factories home, telling them the production suspension could carry on into next week.

Can it sell the cars that it has already built? Maybe, but it’s been unable to register many cars in the United Kingdom, according to reports. Certainly, you should be able to get your Jaguar or Land Rover fixed.

From the BBC, that’s also going to be difficult:

James Wallis of Nyewood Express, an independent garage in West Sussex that repairs and services Land Rovers, told the BBC’s Today programme that he “can’t look up what I need to repair cars”.

“Essentially the parts list is a giant database of items that relates to every single car,” he said. “And if I can’t find the parts, I can’t buy them. I can’t fix the car.”

[…]

Land Rover dealers and repair specialists across the world are affected. Alan Howard, a Londoner who runs a Land Rover parts specialist in Tasmania, Australia, said he has “no idea” when the disruption will end.

“Even though I’m an independent here all the way down in Tasmania, I use exactly the same software as a Land Rover dealer in London,” he told the BBC’s World Business Report. “Monday morning we [came] in and the system is down.”

I love that BBC got the Tasmania angle.

It’s not entirely clear if this is a ransomware attack, but the hackers seem to be linked to the M&S breach, so it probably is.

Hyundai/Kia Plants In Alabama Shut Down After ICE Raid

It is a relatively bipartisan dream to have a bunch of industrial jobs sprout up in the United States, which is a reasonable policy goal that’s unfortunately wrapped in a fantasy of a 1950s-like blue-collar resurgence that would allow single-income households to have enough money to own a boat, a house, and two cars.

I am not going to list all the reasons why people aren’t exactly dying to move to rural areas to work in a car plant, but it’s a big cornerstone policy position of both the President of the United States and the governors of those states to expand automotive manufacturing there. Those plans have hit some snags.

First, the company and its suppliers were given penalties for employing children. I guess, being unable to find enough adults to do the job, Hyundai’s suppliers turned to underage teens. An investigation by the Department of Labor discovered “a 13-year-old worked up to 50-60 hours per week on an assembly line in Luverne, Alabama operating machines that formed sheet metal into auto body parts.”

This week, hundreds of employees building a new battery plant for LG/Hyundai and Kia in Georgia were nabbed in Immigration and Customs Enforcement raids. Per The Guardian:

Hundreds of workers at a factory being built in Georgia to make car batteries for Hyundai and Kia electric vehicles were detained in a massive raid by Immigration and Customs Enforcement (Ice) on Thursday that stopped construction.

The facility is part of what would be the biggest industrial investment in the state’s history and had been hailed as a huge boost for the economy by Georgia’s Republican governor, Brian Kemp.

At least 450 people were arrested, according to the Atlanta office of the US justice department agency, the Bureau of Alcohol, Tobacco, Firearms and Explosives.

However the Korea Economic Daily later reported around 560 workers at the Hyundai facility and LG Energy Solution (LGES), had been detained, citing unidentified industry sources. Some 300 are South Korean nationals, according to local media reports. Hyundai Motor is a South Korean automotive company but has many international plants.

So that’s going well.

Japanese Carmakers Get Their Deal

There is finally a trade deal between Japan and the United States. Is it a good deal? That’s not yet clear. At the very least, much of the uncertainty is gone, as Reuters is reporting:

Formalizing the deal between the U.S. and a key Asian ally comes after months of negotiations, reduces uncertainty plaguing the massive Japanese auto sector since the July announcement and confirms an agreement for $550 billion of Japanese investment in U.S. projects.

The lower 15 percent tariffs on Japanese autos, down from the current 27.5 percent, are set to take effect seven days after official publication of the order.

The executive order also ensured that the 15 percent levy on Japanese imports agreed in July would not be stacked on top of those already subject to higher tariffs such as beef, while items previously subject to tariffs below 15 percent would be adjusted to 15 percent. This relief is retroactive to August 7.

In addition, it promised no tariffs on commercial airplanes and parts.

This is still going to make things more expensive, at least according to a recent survey of Japanese suppliers:

A Nikkei survey on U.S. tariff policies found that more than 80% of major Japanese auto parts makers have either forwarded the added costs of import levies onto customers or are considering doing so.

With automakers in the U.S. — namely, Japanese companies with American factories — having to pay higher prices from overseas suppliers, subsequent higher vehicle prices are likely to impact consumer demand in the country.

I’m glad I already bought my car.

Mary Barra Cashes Out $53 Million In Stock Awards

I don’t think I’d tell people if I got $53 million, but the Merkur dealership I opened up would probably be a giveaway. As CEO of a publicly traded company, Mary Teresa Barra had to post her sale of 907,024 common shares of GM last week.

Is there something nefarious going on here?

According to this Detroit Free Press article, the answer is naw:

According to Dan Ives, senior equity analyst and managing director at Wedbush Securities, Barra’s stock sale is not alarming to his firm.

“We are not concerned about this and it’s about shares that hit some triggers,” Ives said. “Barra remains a key part of the GM’s success and we do not view this as a needle mover.”

By triggers, he means GM may have an algorithm in place to automatically sell some executives’ shares when they hit a certain price. GM confirmed that this applies to Barra’s compensation.

I like to think that she’s buying a minor league baseball team. Maybe the West Michigan Whitecaps?

What I’m Listening To While Writing TMD

Since I teased They Might Be Giants yesterday, here’s Stniag Eb Thgim Yeht with “ECNALUBMA.”

The Big Question

How many cars would you buy with $53 million?

Top photo: Jaguar