Mumbai. Ratan Tata, hurt by alleged humiliation by some of the company's executives, in 1999 after deciding to sell his passenger vehicle division to Ford Motors after Tata Group's large passenger car Tata Indica failed to generate expected profits, rejigged his strategy. Changed and not only achieved success but also bought Ford's JLR in 2008. The Tata Indica, the Tata Group's flagship passenger car, was not delivering expected profits even a year after its launch. Frustrated, top executives of Tata Motors, led by Ratan Tata, accepted Ford Motors' request to potentially sell the passenger vehicle division to the major American automaker.
Some people had advised Tata to sell the business and Ford officials had come to Bombay House for talks. During the meeting held at Tata headquarters, the American company showed interest in buying the business. After this, under the leadership of Ratan Tata, top Tata officials reached America for the meeting, which lasted for about three hours. According to a person present at the meeting, Ford executives "humiliated" the Indians who came to the Detroit meeting.
Ford executives told their guests, 'You have no idea why you started the passenger car segment' and talked about doing the Indian company a favor by buying its business. The deal fell apart. This embarrassing experience inspired Ratan Tata to focus more on his goals. They decided not to sell the unit. What happened next is a great example of creating a success story from failure. The team decided to return to India immediately after the meeting, which the person present there described as "disgraceful". On the 90-minute flight back to New York, a sad Ratan Tata spoke only a few words. He was silent the whole time.
Praveen Kadle, an old member of the group, had said in a public program a few years ago, 'This was in 1999 and in 2008 we bought the same JLR from Ford. Ford Chairman Bill Ford thanked Tata and said, 'By buying JLR you are doing us a big favor.' Tata Group bought Ford for US$ 2.23 billion in 2008.
0 Comments