Tata’s Trust

YOU KNEW MUCH about him because he was after all at the core of Indian business for half a century, but not really of him. The new biography Ratan Tata: A Life, by Thomas Mathew, throws open that window in some measure. The portrait that presents before the reader is exactly as you imagined him. A man decent, gracious and with a sense of purpose, but also relentless and un­yielding. Someone who despite being a Tata had his work cut out all his life, and above all, was the reason why the Tatas continue to be the enduring brand it is, a rare conglomerate driven as much by values as bottom line.

The Tata Group is humongous in size but if there is a thread running through the myriad companies under that umbrella, the reason for that, the book shows in great detail, is Ratan Tata. In the time of his predeces­sor, JRD Tata, the legendary patriarch of the group and family, the companies carried the Tata name but were near-autonomous, the glue holding them being the personality of JRD. Ratan Tata reengineered this, slowly but surely and not without opposition, into a single body of many parts by institutionalis­ing the identity.

Nothing about all this was a given. When he completed his course in architecture in the US in 1962, he had been in two minds about returning to India. Wanting to be with his ailing grandmother helped in making that decision. Still, he did not join the Tatas. It was with IBM that he took up a job before JRD persuaded him to join the group and made him work from the bottom up. He was first an apprentice with TELCO, the earlier avatar of Tata Motors. The book says, “He stayed in the apprentice hall, where the dealers from around the country who came for training in marketing were housed.” From there he moved to TISCO, now known as Tata Steel, where he learnt how steelmaking happened right from the furnace onward. ‘Some told him to “shovel limestone into the open-hearth furnaces”. He reminisces that another day somebody would say, “you need to know how to tell the temperature from the colour of the flames so I’ll teach that to you” and “go on top of the coke ovens,”’ says the book.

His first major test was in 1971 when he was made director of NELCO, a manufacturer of radios, that was running into losses. He made it profit­able but some of his more prescient ambitions, like getting the company to make computers in the mid-1970s, ran against the wall of the Indian licence raj. The second test of being given charge of Empress Mills, became an ordeal by way of labour unrest and the reluctance of the group to infuse fresh capital. It got liquidated eventually and was counted among his failures. When the 1980s arrived and it was clear that JRD would have to nominate a succes­sor, Ratan Tata wasn’t a certainty.

An anecdote of those times in the book gives an indication of his character. JRD had a soft corner for Russi Mody, the chairman of TELCO, and when he wanted him to replace TISCO chairman Sumant Moolgaokar, Tata, as deputy chairman, was asked to publicly declare that he wouldn’t work under Moolgaokar. Rather than being dragged into the politics, he sent his resignation letter instead and “went home a less burdened man, picked up his dog and set off for Juhu.” When he returned, JRD’s driver was there asking him to come along. “Ratan telephoned JRD, who asked him: ‘What are you do­ing?’ Ratan replied: ‘Jeh, I’m not giving you an ultimatum, I’ve done it.’” The plan was shelved and he was persuaded to withdraw the resignation.

When JRD eventually decided to hand over the reins of the group to Tata, it was 1991. The decision has been borne out by how successfully the Tatas have managed to thrive in post-liber­alised India. It could do so because Tata had already anticipated the changes about to happen and the group’s needs to change the way it functioned. Almost as soon as he became chairman, he started restructuring. Tata Sons had a very low share percentage in group companies making them possible targets for a takeover. The book notes: “Speaking in 2002, Ratan said that ‘one of the first issues that struck’ him when he ‘embarked on the restructuring programme’ was whether the group had a ‘right to manage them’ because of its small shareholdings.’” He set a target of 26 per cent stake and achieved that eventually. He modernised the com­panies, veered them into areas of new technology and made the group global through acquisitions. The first one to do so was Tata Tea when it bought Tetley. There was Corus for Tata Steel and Jaguar-Land Rover for Tata Motors.

In the book, Mathew has chapters for each of the major companies and the contribution of Tata in shaping them. A retired bureaucrat who knew Tata for 30 years, the book reflects the access that he received. There is however little that we get to know about his subject’s flaws, and even a Ratan Tata must have some. The book however does go into length about the business mistakes Tata made, like overpaying for Corus or the debacle of the Nano car. It also has a lot to say on the last big battle of Tata, in removing Cyrus Mistry, his successor, after realising that he was just the wrong choice to lead the group. There are quotes from Tata and other insiders on what transpired during that difficult pe­riod—what led to the decision and the strain it put on him and his reputation. That decision has been proven right considering the group’s performance under the present chairman. The ship still sails on the map set by Tata even though he is no more.

An anecdote in the book is telling about Tata’s personality and the reason for his reputation. After Tata Motors acquired Jaguar-Land Rover, American dealers thought an Indian company was the wrong fit for these iconic brands. One of them, Ken Gorin, became a voice against the acquisition, saying that India reminded them of people going to work on cycles. Once the acquisition was done, Tata went personally to the US to engage with dealers and Gorin was the first he met. They talked for nearly seven hours. When Mathew interviewed Gorin, he told him, “What an elegant man, what a humble man, [a] brilliant man.”

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