The Tata way of paying back humiliation: doing the 'favour' of 'buying out'

Mumbai: Tata Indica, the Tata Group's big passenger car bet, was not delivering expected returns a year into its launch. Desperate, the Tata Motors brass, led by Ratan Tata, acceded to a meeting request from Ford Motors for a possible sale of the passenger vehicles division to the American auto major.

Some people had advised Tata to sell the business, and the Ford officials came to Bombay House to hold talks.

During the meeting at the Tata headquarters, the American company evinced interest in buying out the business after the not-so-warm response to the hatchback car for over a year since launch.

Soon, top Tata officials, led by Ratan Tata, went to the US for a further meeting, which lasted about three hours.

According to a person who attended the meeting, officials from Ford "humiliated" the visiting Indians at the meeting in Detroit.

"You do not know anything, why did you start the passenger car division at all," the Ford officials told their guests, and spoke about doing a favour to the Indian company by buying out the latter's business.

The team decided to return to India immediately after the meeting, which was described as "humiliating" by the person present. On the 90-minute flight taking them back to New York, a sombre Ratan Tata spoke very few words.

"This was in 1999 and come 2008, the same Ford's JLR was bought by us. Ford chairman Bill Ford thanked Tata, saying, 'You are doing us a big favour by buying JLR'," Pravin Kadle, a long-time group veteran, had recounted during a public event a few years ago.

In 2008, the Tata Group bought the iconic brands from making sedans and sports utility vehicles in a USD 2.23-billion deal from Ford.

Post-acquisition, the Tata Group has scripted one of the most fabulous turnarounds in the auto industry and has been able to position the marquee British brands as formidable entities in the fiercely competitive global car market. Even as Tata Motors has come a long way and gained market share in India, it continues to earn a significant part of its revenues from the JLR.