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Tata Pulls Ford Units Into Its Orbit

HEATHER TIMMONS From New York Times| January 04 , 2008 09:12 BJT

LONDON — When Ratan Tata visited the home of the designer Ralph Lauren last autumn, the two auto enthusiasts spent much of their time in the garage, admiring Mr. Lauren’s extensive car collection, including the Batmobile-esque 1955 Jaguar XKD.

Now Mr. Tata is poised to take over Jaguar itself.

Tata Motors said Thursday that it was entering detailed talks with Ford Motor about the takeover of Jaguar and Land Rover, confirming what investors and analysts in India, Detroit and Britain have anticipated for months. Tata said it intends to reach an agreement on a deal over the next few weeks.

For Mr. Tata, who is 70, the takeover will cap 16 years transforming one of the world’s most diverse and unusual conglomerates, the Tata Group. Through 98 companies, Tata creates and sells everything from steel to tea to watches, making the company’s name ubiquitous in India. Under Mr. Tata, the name has started to reverberate around the globe as well.

A string of international deals in recent years has diversified Tata to the point where more than half its revenue this year will come from outside India. Tata’s increasingly global outlook is bolstering the overseas ambitions of other Indian companies as well.

Going overseas was a necessity, Mr. Tata said. In the late 1990s, the group’s truck unit recorded a loss that was the “biggest in Indian history,” he said in a recent interview in Tata’s headquarters in the leafy, historical Colaba district of Mumbai. “We were so dependent on one economy,” he said. “I decided we needed a broader view.”

Since then, Tata has completed dozens of deals, buying businesses as diverse as Tyco Global Network, Daewoo Commercial Vehicles, the Moroccan chemical company Imacid, Tetley Teas and most audaciously, the $11.3 billion takeover of the British steelmaker, Corus, last year, a company several times the size of Tata Steel.

The latter deal garnered Mr. Tata some rare criticism, with analysts wondering if he had finally taken on too much. Corus “came to us, we didn’t seek them out,” Mr. Tata is quick to say, and it was a deal he could not pass up. In “one swoop we were in Europe, where we weren’t before,” he said. “That opportunity was going to happen once, and it was not going to happen again.”

Mr. Tata seems the most unlikely of corporate titans — almost preternaturally humble, unabashedly open about the company’s mistakes and about the fact that he never really wanted to be an industrialist in the first place. He studied architecture at Cornell University, and after decades of working for the family business, he says he is even considering opening a small architecture firm when he retires. Never married, he lavishes attention on his dogs, writes thank-you notes to employees who do him favors, and is often spied on Sundays driving alone on Marine Drive in Mumbai in one of the several cars he owns.

The Tata Group is an unusual corporate enterprise. Started in 1874 by Jamsetji Tata, the group has often seemed to value employees over profits and has prided itself on fair business practices, not cutthroat maneuvering. Mr. Tata is a distant relative of the founder.

As chairman of the company, Mr. Tata has been instrumental in carrying out the family legacy, though, and turning what was a loosely aligned group of companies that shared one name into a group with seven business lines and centralized management.

It is a business plan Mr. Tata developed in the most unlikely of settings — he spent three months at his mother’s bedside at Memorial Sloan Kettering Cancer Center in 1981. At the time he was chairman of Tata Industries, then a small part of the group responsible for new ventures. When he was named chairman in 1991, he started reining in some of the company’s independently minded managers and giving the parent company sizable equity stakes in its offspring.

The process was not easy, Mr. Tata wrote with typical candor in a 2003 epilogue to “The Creation of Wealth,” a book about the Tatas. “If I reflect on what these 10 years have been for me personally, they have been a mixed bag,” he wrote. “There is some satisfaction that I’ve seen the group come together in many ways,” he wrote, but “at the same time there is a sense of frustration at the resistance to change from many of my colleagues that I have seen through this period of time.” All in all, he wrote, “it has been a hard and sometimes unrewarding experience.”

 

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