This is the type of story that becomes the parable of legends, household stories that parents narrate to their kids at an impressionable age with the hope of molding them in the right direction.
It goes back a decade and a half to 1999. The Indica, Tata Motor’s first attempt at making a hatchback for the Indian masses has not proven to be the success its makers and fans had wanted and expected it to be. The Indian conglomerate has a bevy of other companies in its portfolio and needed to offload its fledging passenger car operations to a company that knows how to handle it better.
Enter Ford. The American company has shown interest in acquiring Tata’s passenger car division, also spurred, no doubt, by the thoughts of Tata’s wide delivery network and reach in the Indian market.
So, Ratan Tata, then president of Tata Motors and chairman of the Tata Group, went to Detroit with some of his closest colleagues to hash out a deal with Ford.
As it turned out, the executives at Ford were allegedly a tad condescending to the Indian business contingent. The three-hour long meeting turned out to be a disaster, with one Ford official even asking Ratan Tata at one point: “You do not know anything, why did you start the passenger car division at all?”
Apparently, the Ford executives in attendance felt that they would be doing the Indian company a favor by taking a beleaguered company off the latter’s hands.
Visibly embarrassed and perhaps even a bit humiliated, a somber Ratan Tata left the meeting without finalizing the deal. On the 90-minute flight from Detroit to New York, from where the team would then make their way to Mumbai, Tata appeared to be deep in thought, reflecting upon what has just happened.
Wind the clock a decade forward and Ford is struggling to make its luxury marques from across the pond, Jaguar and Land Rover, a success. The two brands, once the choice of connoisseurs, political bigwigs, and industry leaders across the globe, were struggling to break even, even after their parent company pumped in a good deal of effort in new products and cutting edge R&D.
Ford itself was in no flowery shape either, reeling from the global economic meltdown, and almost on the verge of bankruptcy by then. It really needed to jettison Jaguar-Land Rover.
And who would come to their rescue this time but Tata Motors, the ‘small and inexperienced’ Indian firm that has grown by leaps and bounds since then. Tata promptly acquired the British brands for a princely sum of 2.3 billion dollars in 2008.
Post the acquisition, Ford chairman Bill Ford, thanked Tata, saying: “You are doing us a big favor by buying JLR.”
Mr. Ratan Tata, soft-spoken visionary that he is, wouldn’t quite put it in so simple terms, but it is true that “revenge is a dish best served cold.” In this case, a decade cold.
This story comes to us courtesy of Mr. Pravin Kadle, a longtime Tata executive who was part of the Ford delegation at that time and now heads Tata Capital. Mr. Kadle recounted this speech after receiving the YB Chavan National Award 2014 on behalf of Mr. Tata, who is now Chairman Emeritus of the over $100-billion group.
