Ratan Naval Tata is an Indian industrialist, investor, philanthropist, and a former chairman of Tata Sons who serves as its chairman emeritus.
Triumph over humiliation
Ratan Tata, who was the chairman of the Indian conglomerate Tata Group in 1999, faced ‘humiliation’ when he with his team went to sell the group’s fledgling car business to Ford in 1999, but came back to ‘do a big favour’ just nine years later by taking over the US giant’s marquee brands Jaguar and Land Rover (JLR).
The deal came at a worse time
Just months later, the global financial crisis hit, thrashing the auto industry, including Tata Motors, which made trucks and inexpensive cars too.
JLR was going through a rough patch
Tata bought Jaguar and Land Rover in all-cash transaction of $2.3 billion from Ford in June 2008. Nearly half of what Ford Motor paid to acquire both brands.
At that time JLR’s retro designs was getting outdated, and competing with new efficient diesel engines was just making the British carmaker redundant. It’s not that the American car manufacturer Ford did not tried the turnaround.
The carmaker started the work much earlier with focus of resolving quality problems. But, the carmaker was not able to really dent the luxury car market. Before handing over to Tata Motors, Ford launched Jaguar X-Type, an entry level Jaguar, but later criticised for building a disguised version of Ford’s bestselling Mondeo sedan in the European markets.
The word “Great” is not the only difference in “just people” and “great people”. The story below, should tell the reason.
TATA group is a leading business house in India. Apart from scale of business operations, they are also known for values observed in their business practises.
Ratan Tata is another man, who continued the legacy of India’s most trusted business.
When someone is insulted, anger is the only outcome. However, great people can use this anger to plan business policies and goals.
Tata group launched its passenger car Tata Indica in year 1998. The group was led by Ratan Tata and it was his decision to enter in the passenger car business.
Tata Indica was a failure in its first year and the experiment seemed to be failing. Many people started advising Ratan Tata that he should sell the passenger car business. Ratan Tata also agreed to this and a proposal was given to Ford, they showed interest too. Ratan Tata, along with his close team members reached Detroit to discuss the same. Detroit hosts Ford headquarter and considered and the automobile hub of United States.
While the meeting went on for 3 hours, it seemed that the behaviour of Ford people was insulting toward Tata group representatives. In the meeting, chairman of Ford (Bill Ford) said to Ratan Tata, “why did you enter in the passenger car business when you were not knowing of it. It will be favor if we buy this business from you”.Ratan Tata decided to move back home. While travelling, he was very tense as the feeling of being insulted was on his mind.
After earlier failures, Tata Motors did well with its business of passenger cars but in the same period, Ford did very bad. In 2008, when Ford was on its way of bankruptcy, Tata Group offered Ford to buy their luxury car brand Jaguar-Land Rover. Bill Ford, along with his team, reached “Bombay House”. “Bombay House” is the headquarter of Tata Group. The deal was finalized for 2.3 billion US $, which amounted to 9300 crore Indian Rupees at that time. Ford was incurring heavy losses from Jaguar – Land Rover division.
In the meeting, Bill Ford said to Ratan Tata, ” You are doing a big favor for us by buying Jaguar- Land Rover”.
Jaguar- Land Rover is now owned by Tata Group and is currently making profit