Must Read : How Ratan Tata took revenge on Ford by buying out JLR

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Added in: Features

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‘You do not know anything, why did you start the passenger car division at all?’

– A question from Ford officials that sparked angst inside of Ratan Tata, an angst that was followed by an acquisition 9 years later that humbled one of the world’s biggest automotive conglomerates.

Back in 1999, Tata Motors were having trouble shifting units of the home grown Indica hatchback, which was launched in 1998. Seeking help, Ratan Tata, with his team in tow, traveled to Detroit to sell off their fledgling passenger car business to Ford, who had feigned interest.

However, the 3 hour meeting with top Ford executives didn’t go too well, and the team had to put up with a lot of ‘humiliation’, as recalled by Mr. Pravin Kadle, who was part of the team at that time and now heads Tata Capital. The Ford executives even went on to say that they would be doing Tata Motors a favor by buying their passenger car division.

Ratan Tata

Ratan Tata, understandably disgraced, left the room without finalizing the deal, and flew back to New York with his team that very evening, before flying back to India. Throughout the 90 minute flight to NY, Ratan Tata, then the group chairman, was visibly somber, recollects Mr. Kadle in a 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.

Nine years after the ‘humiliating’ meeting, life turned a full circle in 2008, and Ford, reeling in bankruptcy due to the global meltdown, had to let go of their cherished, iconic Jaguar and Land-Rover brands for $2.3 billion to Tata Motors. A wave of sweet revenge wafted in the air, when Ford chairman Bill Ford, post the acquisition, thanked Tata, saying ‘you are doing us a big favor by buying JLR’.

Today Jaguar Land Rover, after making a dramatic turnaround, is the mainstay of Tata Motors’ finances, apart from its traditionally successful commercial vehicle division.

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