"Tata", an Indian giant that embodies the changing balance of global economic power

Jamcity Tata

A view from inside the Jaguar Land Rover factory.

The Tata Steel Plant in Port Talbot, Wales.

At an exclusive dinner in 2011 in a London ballroom, Britain's elite political and business elite gathered to pay tribute to the man and company who have reshaped the UK economy over the previous decade. Nick Clegg, then Deputy Prime Minister, told the audience at the event hosted by Asia House. Asia House intellectual: "You deserve this warm thanks, not just from everyone here but from the state." Oliver Litwin, former Minister in the Government Office, praised the virtues of “the most distinguished industrialist, who has brought huge benefits to our country and certainly to his own.” The commendation was given by Ratan Tata, a seventy-year-old in his penultimate year as chairman of India's Tata Sons, which She oversees a 152-year-old business empire that covers dozens of companies in everything from manufacturing to airlines, retail and information technology. At the turn of the millennium it embarked on a shopping spree abroad - with the UK at its heart - that for many was the epitome of the height of the globalization era. Port Talbot, Wales. Having started its operations under British colonial rule, Tata has become the UK's leading industrial company to be a proud symbol of the shifting balance of economic power in the 21st century. Unrecognized. Let's look at what the UK can actually do. It's all there.” Since then, the Tata Group's strategy at home and abroad, particularly its belief in British industry, has been severely tested. International acquisitions were mostly made before the financial crisis of 2008, which dealt a blow to European manufacturing, with problems subsequently exacerbated by Brexit and trade wars. Even Tetley has had to deal with a British public that is no longer drinking tea as it once did. The economic downturn caused by the coronavirus has complicated the group's difficulties in dozens of countries across its massive $113 billion revenue pool, and it may have to reduce its presence in industrial sectors. Heads including UK. Chairman Natarajan Chandrasekaran remains committed to the UK's steel division of Tata, but does not rule out an exit if restructuring plans fail. “We are at an inflection point for Tata Steel," he says. The company's UK steel division, which has failed to break even at the operating level for a decade, is draining money. In June, unrest among the Dutch workforce culminated in the first strike in nearly 30 years at Tata Steel Europe's IJmuiden plant in the Netherlands. Jaguar Land Rover, which has fallen behind other carmakers while suffering from under-sized and ballooning costs, is now laying off an additional 1,000 workers as it looks to save £6 billion by next March. Pressure has forced Tata to seek aid from the British government. But while the company said last week that it is not currently looking for government funding for Jaguar Land Rover, it continues to seek support for its steel business. A population of 1.4 billion people makes Europe look relatively unpromising. But Chandrasekaran, who took office in 2017 with a mandate to reduce and streamline the group's leverage, says he is committed to reviving underperforming UK manufacturing operations even as the group seeks new opportunities back home. Tata Consulting Services, its leading money-making company, is an IT contracting group with annual revenues of more than $20 billion and a presence in dozens of countries. The group is also exploring new projects, including ambitious "super apps" plans that it hopes will propel it to the forefront of India's burgeoning consumer technology market. "The focus on geographies should constantly shift depending on where the demand is, and where the next big opportunity is," says Chandrasekaran. This does not mean that we are withdrawing from globalization.” Second Home Soon after Jamsetti Tata founded the textile and trading company bearing his name in 1868, he traveled to England to see English factories first-hand. By 1907, the Tata Group had opened its first overseas office in London, but it would take almost another century for Tata, thriving in the newly liberalized Indian economy, to make its biggest strides abroad. , seeing limited opportunities left in India because the group is already operating in too many sectors. They thought London would be the right place and they started exploring." A whopping 6.2 billion pounds in 2007 after eight hours of direct bidding against a Brazilian competitor. But Tata Steel's European foray soon proved to be a problem. Not only was it expensive - a 68 per cent premium to Corse's pre-offer share price - but it coincided with the height of the commodities boom. Problems have been mounting ever since. Europe's steel industry has not fully recovered from the financial meltdown in 2008 and Tata Steel has not taken a profit from its European subsidiary. Although the company's Dutch IJmuiden plant is benefiting from economies of scale and its own seaport, the UK business is struggling A legacy marked by underinvestment, high energy costs and geographically dispersed factories that pile up logistics costs. The Dutch workforce complains that its steel mills usually turn a profit but have to support a struggling sister plant in Port Talbot, which has led to tensions expressed during recent strikes. In the Netherlands, Roel Burgess, director of the trade union FNV, which represents Dutch workers, says: "What we see is that for more than 20 years - also in Corse's time - we make profits here and the money goes to Britain. That's how we feel at IJmuiden." The company denies that the Dutch company Tata Steel covered losses in the British company Tata Steel. Tata threatened to quit the UK steel industry in 2016, but in the absence of a reliable buyer, the government persuaded it to stay. A proposed European joint venture with Germany's ThyssenKrupp was banned by the European Commission last year on the grounds that it harmed competition. Meanwhile, it has focused on its more successful operations in India, where it acquired a bankrupt steel manufacturer in 2018. The Indian business now accounts for two-thirds of steel production capacity and Europe a third. The group now needs to decide whether to continue financing its UK steel business. , with little prospect of making money in the short term, or cutting losses by closing Port Talbot and selling smaller factories. Given its other British interests, the latter would be politically charged. One option that Tata has examined is to replace the two Port Talbot blast furnaces with electric arc furnaces that recycle scrap metal, a more environmentally sustainable solution. But such a sweeping change requires an investment of hundreds of millions of pounds and inevitably means significant job losses because electric furnaces are less labour-intensive. “If we can come up with this plan, we will be able to transform that industrial area in Wales for long-term sustainability,” Chandrasekaran says. But if that becomes unworkable, we will have to explore other options.” He adds that while Brexit itself has not made the UK unattractive, tariffs or disruptive customs inspections may make the group's companies "uncompetitive". Tata Motors launched Jaguar Land Rover from Ford in 2008. When the range of luxury cars went up for sale, Tata traveled to Britain on a top-secret expedition, at the behest of British industrial champion Kumar Bhattacharya. Traveling around Jaguar's West Midlands locations in a borrowed Mini Cooper, Tata saw the ramshackle auto factories as an opportunity for the Indian group to boost its international operations. Over the nearly decade after the £1.5 billion takeover, Tata's ownership of the group was an exemplary example of international management. The company put together a leadership team led by former BMW CEO Ralph Speth, poured money into the business and then largely left the automaker to run itself. Annual revenue grew from 4 billion pounds at the time of the acquisition to 25 billion pounds last year. But the years of boom, spurred by Chinese demand for the SUVs that represent the group's hallmark, masked fundamental problems exposed by the slowdown in the global auto industry. Overspending, a confused array of vehicles pitting their two brands against each other, and a failure to invest heavily in electric technology have left Jaguar Land Rover far behind its global peers. The company is shrinking in an industry where even the biggest players are still growing in size. Car companies - even high-end brands such as BMW and Daimler, which owns Mercedes-Benz - measure their sales in the millions. Jaguar Land Rover sold only 500,000 cars last year. Analysts say that up to six billion pounds of cuts in the past two years remains well below the extensive repairs needed. “Jaguar Land Rover appears to be committed to incremental cost reductions rather than tackling the big problems facing the company,” says Robin Chu, auto analyst at Bernstein in Hong Kong. However, Chandrasekaran is optimistic about the automaker's prospects. "Jaguar Land Rover was a great story," he says, rejecting calls to scrap the underperforming Jaguar brand and sell a stake in the company. “We are committed to both Jaguar and Land Rover brands.” In July, Tata Motors appointed former Renault boss Terry Bollore as the new CEO of Jaguar Land Rover, shaping the future of the company. Chandrasekaran also promised to help Tata Motors relieve its debt burden, And reduce the group's debt levels by the middle of the decade. "We will reduce debt significantly in the next three years," he says. But the lack of overlap between Tata Motors - the direct parent company of Jaguar Land Rover - and its own management team, and the British company has baffled analysts and even longtime insiders. Low-cost, commercial vehicles from Tata Motors - means that even initial cost savings, such as vehicle platforms, are not available. A former Tata senior manager says: “One-Way Ralph Speth and Gunter Boschek, CEO of Tata Motors, are thinking about Another direction, and they are both accountable to Chandra. This is a mess." Sir Ralph at Jaguar Land Rover will remain as Non-Executive Chairman. Chandrasekaran's vision includes broader efforts towards electric vehicles in India, as well as the "global aspirations" of the domestic commercial vehicle arm. “Tata Motors has huge potential for growth,” he says. Domestic criticism In India, the Tata Group faces tough questions about its level in terms of international performance. Former president Cyrus Mistry, currently embroiled in a bitter legal dispute with the group over his dismissal in 2016, has argued in court filings In June, a "catch of ill-advised global acquisitions" had contributed to the "largest value destruction in Indian corporate history". He claimed that Tata's performance had worsened since his departure. In court filings, Tata & Sons strongly contested Mistry's allegations and defended the group's record. She argued that Mistry spent his leadership time "often 'finding' and 'blaming' the past" while at the same time burdening subsequent management with hundreds of billions of rupees in keeping weaknesses unaddressed. Nirmalia Kumar argues , who was head of strategy under Mistry, said that Tata did not pay enough attention to its home market. “Looking at the opportunities for India versus the rest of the world, when combined with the potential of the Tata Group, we have exaggerated and excited a lot in the past in terms of the international mix versus the domestic mix,” he says. Even as it doubles down on its new efforts in India. India has recorded more than three million cases of coronavirus, and the country's Tata group of companies has faced mixed fortunes during the pandemic. The blows to its airlines and hotels are partly offset by strong demand for daily staples such as salt or tea, as well as by TCS making its way into areas such as artificial intelligence and cloud services. Central to Chandrasekaran's vision is the project to turn Tata into a conglomerate. A consumer-focused digital at a time when global technology companies are pumping money into e-commerce in India, and hundreds of millions are using smartphones and shopping online for the first time. . It is also pressing ahead with its ambitious plans to launch a "super app" for Tata that brings together for the first time a diverse range of products and services - ranging from food and groceries delivery to financial services and electronics. The administration said he does not intend to back down in Europe, or anywhere else. "We are doing all the necessary things to be able to face the future. We are preparing to seize opportunities," he said.

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