Ratan Tata, the silent sufferer

--- TAMAL KUMAR MAJUMDER

During the last three years after his retirement as TATA SONS Chairman, it has become a fashion to criticise Ratan Tata.

Recently serial entrepreneur Amit Bagaria angrily mentioned the following in his article titled “Was Ratan Tata a successful corporate chieftain? -”

And why would anyone pick the brand name Nano (means “very small”) compared to Jeh (JRD Tata’s nickname, one of the original names considered) or Maxi (another name suggested by a branding agency)? “

As if the brand would have been very successful if they introduced the small car naming it as Jeh or Maxi !!! It is also not clear to me why he is so angry for rejection of one name – Maxi suggested by a Branding Agency?

His calculation of R&D amortisation relating to NANO as “Given that Tata Motors reportedly invested $1B in the design and development of the Nano, in 6½ years, each car sold has costed Rs.240,000 in capex amortization alone. Can there be a bigger business disaster? “ made me spellbound.

I humbly want to ask him which listed Car Company except MARUTI used their 100% capacity during the last couple of years ? Whether $1B investment in design and development is an official figure ? What is the basis of such full amortisation within 6.5 years when Tata Motor’s Accounting Policy says “ PRODUCT DEVELOPMENT COST are amortised over a period of upto 120 months for new generation vehicles .” ? Whether he calculated such R&D AMORTISATION figure for other Car Companies also for comparison with TATA MOTORS ?

Ratan Tata retired as the Chairman of TATA SONS on 28-12-2012. So, in what logic, Sale of NANO cars during the period 29-12-2012 – 31-03-2015 attributed to his so-called failure ?

Nobody is mentioning the fact that it is he, who took the challenge and introduced the cheapest car in the world by launching Nano in 2008 with his team.

For a new concept like Nano we should give the brand a couple of years more to become successful. Mr.Ravi Kant , Vice- Chairman ( Retd), TATA MOTORS in his Forward to the Book “ Small Wonder, The making of the Nano “ echoed – “ It took the imagination of one person to see the need for a safe and comfortable alternative. That’s innovative thinking.......But we can say with humility that the idea of Nano has only began to take root. We understand that it will take a lot more to make it a strong and healthy tree.”

Mr.Bagaria talked about high price paid for TETLEY takeover but curiously remained mum about turnaround of Jaguar Land Rover (JLR) under Mr.Tata’s leadership. He also remained mum in respect of the huge profit declared by it for the last couple of years including 2014-15.

Critics always fail to mention about the formation of M/S KANAN DEVAN HILLS PLANTATIONS COMPANY (PRIVATE ) LTD, as the largest employee owned Tea Company in the world on 01-04-2005 after transfer of South Indian Operation of TATA GLOBAL BEVERAGES LTD ( Erstwhile TATA TEA LTD) into it during Mr.TATA’S tenure. Mr.TATA and his team instead of selling those units at hefty profits decided to create such an unique outfit.

He showed EBITDA of CORUS but failed to mention EBITDA of Jaguar Land Rover !!! CORUS/TATA STEEL is not the only Company who is suffering. Please have a look at other steel companies including JSW & SAIL. JSW STEEL’s USA and UK operations are in very bad shape. Global steel scenario is in doldrums. ARCELOR- MITTAL is also in trouble. So, it is not correct to show CORUS/TATA STEEL’s financial results alone in order to put Mr.TATA’s decision to buy CORUS in bad light.

In this connection I believe that it is also not a good strategy on the part of TATA STEEL of taking the route of selling group investments in order to decrease losses.

In a recently published book “Six Lenses – Vignettes of Success, Career and Relationships “, R Gopalakrishnan mentioned the following (Page – 180) -

“ In those days Tata leaders were not really working as a team. The way to becoming one cohesive group and working as a team was finally ushered in by Ratan Tata, who in a quiet sort of way , made sure that all Tata companies moved in the same direction. Tata is now a far more congenial and unified team than what prevailed during the earlier decades of Jamshed’s (Dr.J J Irani) career.The exercise of unification was initiated by Ratan Tata in the 1990s.”

We should keep in mind that the TATA BUSINESS EXCELLENCE MODEL and JRD QUALITY VALUE AWARD, both adopted/started during 1994 i.e during Ratan Tata’s tenure as Chairman and it is still playing an important role in transforming TATA GROUP in the right direction.

We should also not hesitate to remember that TATA GROUP’s highly successful software Company TATA CONSULTANCY SERVICES LTD was listed in the Stock Exchanges during Ratan Tata’s tenure.

During 2008 Mumbai attack we noticed another aspect of Ratan Tata’s towering personality who is caring, proud of his employees and who motivated his employees to restart the functioning of TAJ MAHAL PALACE AND TOWER within less than 4 weeks time from the carnage by saying " WE CAN BE HURT BUT CANN'T BE KNOCKED DOWN."

His able leadership inspired FORBES MAGAZINE'S SENIOR EDITOR (ASIA) ROBYN MEREDITH to write the following during the critical period –

"While it (India) has the sympathy of the world (after the Mumbai terrorist attack), India could have an Obama moment–one in which a leader, whose personal history epitomises the country's principles, marches forward to unite the country during its very moment of trauma. India has a chance now to get it right, but it needs a strong, credible leader to step up." .

..."As an American, I don't get a vote in India, but if I did, mine would go to Ratan Tata"

.."He is not a politician, but he is the country's most respected business leader. His Tata Group owns the Taj hotel that was just attacked, but his family is just as connected to India's proud history as its shell-shocked present."

He is still very active in the field of Group’s innovative CSR Projects and is also acting as Mentor to many promising Startups.

Ratan Tata during his 21 years tenure as TATA SONS Chairman gave very few interviews. He always remained low profile and never took part in any duel with the media. Despite that he is being targeted regularly by his critics.

He is an icon and will remain so in future also.

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Feedback .

I read your piece on Mr Ratan Tata. It is ironical & easy to pin-point maths and do selective reporting for many who perhaps first form a view and then use statistics to substantiate their point.

The very fact that Mr Ratan Tata built & made such a large conglomerate, encouraged innovation & helped Tata group businesses penetrate all continents of the globe, speaks volumes about his vision. Not just business, the humility of the person and his selfless contribution to the society have no parallels, even by miles.

Therefore selective nit-picking by some critics is nothing short of witch-hunting and is best avoidable. At the same time constructive critiquing has always been welcomed by all leaders within Tata system, ably led by Mr Ratan Tata himself, who is always open to suggestions and inputs from anyone!

All within Tata group have tremendous respect for Mr Tata, his leadership, his vision and above all his humility. I haven't come across any individual (representing even any specific walk of life) who have acquainted me with any chinks in Mr Tata's armoury. We and the society at large would always remain proud of Mr. Ratan Tata for having blessed and continuing to mentor & guide many youngsters like us!


Anil Sardana
CEO & MD,
The Tata Power Co. Ltd

I read the article with interest and I fully agree with your views.A person should be always judged holistically and not by the results (financial) he was responsible for.

When Ratan Tata took charge there were certain icons in the Group like Russy Modi,Darbari seth who ran their companies as if it was their fiefdom.He gave them an honourable exit from the group and started the transformation process.

In my view more than what he achieved in terms of acquisitions etc , he should be remembered for his role in the aftermath of the 26/11 attack. No person showed the kind of concern for the victims as much as he did.In my book, he will go down as one of the greatest humanist business leaders this country has seen.

Ramaswami Kalidas

I browsed through the article and as always, you have been meticulous in correctly reflecting the facts!
Nice one.
Keep writing....

JYOTIN MEHTA