The smartest guy in the room
Ratan Tata has single-handedly saved the British car industry, and now he’s ready to bid adieu
 | Tata: He started his career shoveling limestone at Tata Steel. Photo credit: NEILSON BARNARD/GETTY IMAGES |
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When Ratan Tata was a boy in 1950s India, he had his portrait painted according to family tradition.
"You were subjected to sit for the portrait painter for hours and hours," Tata said in a quiet moment of reflection. "God, how I hated that, but looking at my portrait now I see in my hand I had a toy airplane. I loved them as a kid, and my love for cars and mechanical things came from that."
This love -- and the single-minded drive behind it -- helped the Cornell-educated Tata become one of India's most respected corporate leaders. He transformed Tata Group into a company with more than 100 businesses around the world, including British steelmaker Corus and Tetley Tea. Yes, tea. In the Tata Group portfolio, you will find consultancy services, power companies and hotels.
And, of course, you'll also find Jaguar and Land Rover. It's easy to say he saved the two storied marques, but it goes further: Had Tata not bought Jaguar Land Rover, it could easily be argued, there would be no British auto industry.
Who is this guy?
You think of global auto industry leaders, and there are arguably three giants: Fiat boss Sergio Marchionne, Volkswagen's Ferdinand Piech and Nissan-Renault chief Carlos Ghosn. But these days you must add Ratan Tata, 74, to that list -- four of the smartest guys in the automotive room, if you will. Dare we call Tata the Piech of India? Perhaps it's better said that Piech is the Tata of Germany.
Consider: Tata took Tata Motors from what was originally a forger of locomotives to a global powerhouse. Since he took the helm at Tetley Tea, it has risen to become the world's second-largest tea maker. The Corus buy came in August 2007; at the time, it was the largest takeover ever of a foreign company by an Indian concern. Instantly, Tata Group was the world's fifth-largest steel producer.
Shoveling limestone
Tata sips water in an upstairs meeting room at a newly opened Jaguar Land Rover dealership in Paramus, N.J., a showcase store just up the street from the company's U.S. headquarters. There are four Jaguar Land Rover executives in the room, but they sit quietly and let him talk.
He's soft-spoken, unfailingly polite and has a ready smile. Tata's a good listener, and as such he considers questions carefully before he answers. He comes off as humble -- almost shy -- and you get the feeling he could easily blend into any background if he chose. That he started his family business career in 1962 on the shop floor shoveling limestone and handling the blast furnace at Tata Steel likely has something to do with today's demeanor.
Over the next few decades he worked at several jobs in the empire, including stints in its radio and electronics divisions. In 1981, then-Chairman J.R.D. Tata stepped down from Tata Industries and named nephew Ratan as successor. At the time, some inside the company grumbled that Ratan lacked experience running a company on the scale of Tata Industries.
It was a short decade later that he was appointed group chairman of Tata Group -- thanks in no small part to his organizing Tata from a loose bunch of individual entities into a cohesive company.
Sitting with Tata, you can't let his calming demeanor lull you into thinking he doesn't have the toughness or acumen to power a company. In India, he is revered.
Was Tata's Jaguar Land Rover purchase the perfect fit? The deal went down in March 2008, and Tata Group paid $2.3 billion. The buzz then said it was too much, but it was about half what Ford originally shelled out for the two brands -- Ford bought Jaguar in 1989, Land Rover in 2000. Jaguar Land Rover didn't make money under Ford.
Well-publicized Jaguar debacles such as the X-Type and its anemic Formula One program, to name just two, killed Ford executives' confidence that the British brands could succeed. As Ford's Blue Oval struggled with its own financial woes, Jaguar Land Rover sat on the shelf. Eventually, Ford dismantled its ballyhooed Premier Automotive Group, and in stepped Tata Group to afford Jaguar Land Rover a fresh start without the shackles of the past.
Ask people about Tata's management style, and a common refrain is heard: When he makes a deal, he takes the long view. Tata's ownership has unleashed Jaguar Land Rover to be creative and take risks. He understands a company's historical significance while giving it freedom to move forward.
Just take a look at Tetley. Or look at Jaguar Land Rover -- they're storied British brands that might have become historical footnotes without Tata stepping in. This is a management style that looks out decades, instead of obsessing over market share or 10-day sales forecasts.
Chemistry counts
Maintaining the essence of the companies he buys empowers the people who work for him. "It's almost like working at a startup," a Jaguar Land Rover employee says of the boss. "The company is learning how to be self-sufficient after the Ford years, and Tata is a very nurturing parent. The investment back into the company is unprecedented, and the people are energized."
For his part, Tata says he tries to preserve and build on Jaguar's and Land Rover's heritages without blurring their identities. In fact, he has improved on them. Today, Jaguar Land Rover is the largest investor in automotive r&d and engineering in England; it has two engineering and design facilities in the United Kingdom, along with three manufacturing plants, and is England's largest automaker. When Tata Group bought the marques, Jaguar Land Rover employed nearly 16,000 workers. That number today is 24,000.
Some 65 percent of Tata Group revenues comes from outside India. One small example: Jaguar Land Rover's Castle Bromwich factory in England makes the Jaguar XF, XK and XJ models and exports nearly 80 percent of its build to 101 markets all over the world.
With Tata at the helm, Jaguar achieved $2.3 billion in profits in the 2011-12 fiscal year -- a record -- up $63 million compared with the previous year.
Tata says Ford approached him through an intermediary with the idea of buying Jaguar Land Rover, and it intrigued him. He uses the word "chemistry" often when talking about companies he is interested in, and perhaps that is why he doesn't have to do much interfering.
"Before we acquire a company, we study the people and their value systems and chemistry," he says. "We've looked at many companies, and while they might make sense on paper, in terms of values or chemistry we feel it wouldn't have been a good fit.
"Once we buy, we like to be supportive. We like to help develop strategies. But then we let the team go off and do what they do best. For Jaguar, that means [be] British in its use of materials -- woods and leathers. It means being understated, not crass or vulgar."
He says he thinks Jaguar spent too long making products that related to the past and were afraid to branch out.
'Soul mates' in design
Tata's degree from Cornell is in architecture; he is enthusiastic about car design and designers. "It's a passion of mine," he says. Even with his lack of meddling, working with the Jaguar Land Rover designers initially "took a bit of acceptance" on their part.
Eventually though, the walls came down, he says, and there was more involvement with both Jaguar and Land Rover. Tata says the designers have become more venturesome since the ownership change as he has tried to bring a sense of freedom to the design process.
"In Gerry McGovern" -- the design director of Land Rover -- "and Ian Callum" -- the design director of Jaguar -- "I feel I have two soul mates," Tata says.
He is particularly excited about the just-launched F-Type, the first from-the-ground-up new model Tata green-lighted.
"It's the first new Jaguar roadster since the E-type," Tata says.
"That's too long a time. It was needed to show we can be a sports car company once again, but it needs to be a great sports car and a great luxury car at the same time," he said. "We wanted a car that [you] could drive down to the supermarket, and if you were a serious driver you could do what you wanted on hilly roads or a track -- a car that really had performance, not a sissy car but a truly macho car.
"You should be able to look at it and imagine a big number on the door, or [it being] nice and shiny in the supermarket parking lot."
What's next?
Well, the new Range Rover will be in supermarket parking lots in just a few months. And then there's the idea of a small Jaguar.
Tata finds it intriguing, X-Type be damned. He becomes animated and says, "The idea is it will be small and agile -- a car to get young people into Jaguars.
"I think we recognize the importance of having an entry-level Jaguar that retains the Jaguar brand without looking like another product, one that at the same time is smaller and more agile and more appealing to the young owner who would like to have what Jaguar makes -- namely, a fast car that is attractive and is a sedan."
Has Tata's business acumen ever been oversold? Well, there's the Tata Nano launched in 2009 and priced at $2,000 -- a city car meant to put India on four wheels. Tata persisted through its development, having to move initial production after farmers rioted at the first manufacturing site in protest.
There have been reports of Nanos spontaneously combusting. By all accounts the car hasn't exactly been a rip-roaring sales success.
"We haven't marketed the Nano properly," Tata concedes. "The idea was four wheels, not two, but still affordable. But Indians don't want to be seen in the cheapest car. If they can't afford a 'real' car, they'd rather drive a motorcycle. So we might have to upgrade it."
He's also toying with trying to sell the Nano in the United States.
Tata is set to retire this month. He will be succeeded by Cyrus Mistry, the first non-Indian to head the eponymous company and only the second outsider not named Tata.
The question is whether Ratan Tata can stay retired. What will he do? "I don't quite know what I'll do," he says with a smile, sounding almost mischievous. "I hope to keep flying for a long time" -- he flies his own jet. "I've thought about starting a small design house for young designers. Maybe I'll do that."
That last idea comes as no surprise.
As the man who turned his namesake into a global business -- and in so doing saved two of the United Kingdom's most storied automotive brands -- he remains passionate about the business.
"Even now in meetings," he coyly admits, "I will doodle airplanes and cars, hoping to not get caught."
You can reach Wes Raynal at wraynal@crain.com.
