Ratan Naval Tata Part-6

Ratan Tata's Motorsport Love !!!

Ratan Tata Driving the 1st Indica manufactured at its Facility in 1995

Ratan's Folly

Still, the markets have usually considered Tata to be out of his depth, questioning -- and dismissing -- his big, bold moves as 'Ratan's follies'.

The Indica was the first. People scoffed openly, when, in 1995, Tata spoke of building a passenger car with "the Zen's size, the Ambassador's internal dimensions and the price of a Maruti 800".

The scepticism seemed justified as project costs escalated to Rs 1,700 crore (Rs 17 billion) and Tata Motors posted Rs 500 crore (Rs 5 billion) in losses -- the biggest splash of red in Indian balance-sheet history.

"Even within Tatas, people kept asking me to distance myself from the project so that when it failed I wouldn't be stuck with the blame. And when I refused to do that, they distanced themselves from me," Tata said in an interview a few years ago.

Ratan proved his detractors wrong, and how. Indica went on to become Tata Motors' great success story -- about a million units have been sold since its 1998 launch.

The group's global ambitions were greeted with similar scepticism. The Corus deal would lead the group to bankruptcy, critics declared: investors dumped Tata Steel shares after the announcement, and the share price plunged 11%.

And Tata was driving straight to disaster with the Jaguar-Land Rover deal: the brands were troubled, demand was low. Tata went on to prove everyone wrong. The group's international acquisitions are doing well, some have started making money.

When Tata took over, less than 5% of the group's revenues came from overseas. As the self-consciousness eased, the confidence grew. And with it, the scale of ambition.

Zia Modi

The Ratan Tata of 15 years ago would never have gone for broke on deals like Corus and JLR. The JLR deal was audacious. Tata's interest was sparked as soon as the banks told the group that the marques were available. Why? According to him, "First, as Tata Motors in the number two SUV builder in India, owning [Land Rover] the gold standard of SUVs would be an enormous benefit to us. Second, to own a luxury brand with an immense history and heritage such as Jaguar is a virtually irresistible opportunity."

There's a personal angle to the "immense history": Ratan's father Naval was one of five people in India who took delivery of a new Jaguar XK120 in the late 1940s. "I remember the XK with great nostalgia," Tata commented to a Jaguar team. "I particularly remember the instruments on the dashboard and how stylish they looked."

Less than two weeks after the $3-billion deal was inked, Tata flew into the US on his private jet to meet Jaguar and Rover dealers across the country; for many dealers, it was their first ever interaction with a company executive.

Several years ago, in an interview, Tata dismissed the notion that he was a risk-taker. "There have been certain occasions when I have been a risk taker. Perhaps more so than some, and less so than certain others. It is a question of where you view that from. I have never been speculative. I have never been a real gambler in the sense that some very successful businessmen have been," he said.

Going by that logic, Ratan's 'follies' were decisions guided by prescience and not instinct and gut feel.

Of course, he's not perfect. Ratan Tata personally, and the Tata Group in general, have been bogged down by their share of controversies. When it comes to the environment, especially, the group gets a "can do better" grade.

In recent years, Tata Steel's joint venture with Larsen & Toubro to construct a port at Dhamra, Orissa, has come under the scanner for its proximity to two protected areas, one of which is the world's largest nesting site for the endangered Olive Ridley Turtle and the other India's second-largest mangrove forest.

A soda ash extraction plant in Tanzania also came under fire because of the threat it poses to a nearby lake and its flamingo population.

Tribal rights have also been a touchy subject. In 2006, several tribals were killed while protesting a wall being built by Tata Steel on land that was historically theirs. And Ratan Tata's pet Nano project was mired in controversy about land acquisition for the factory. After farmers in Singur, West Bengal, protested about forcible evictions and inadequate compensation, and Mamata Banerjee leapt into the fray, the Tatas pulled out of the state.

The company shifted the factory to Sanand, Gujarat, but Ratan Tata's subsequent praise for controversial Gujarat Chief Minister Narendra Modi also drew criticism.