Ratan Tata’s Revenge for Being Insulted by Ford

Ratan Tata’s Revenge for Being Insulted by Ford

  19:23    Jimboyrulez

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Hello and welcome to Sunday night Stories. Today I am going to tell you a lesser known story about the man named Ratan Tata and his revenge, for being insulted by Ford Motor Co. So without any further ado let's dive straight into it. 

The word "great" is not the only difference in just "people" and "great people". The story we have, should tell the reason. 

The story is about a man named Ratan Tata, the Chairman of TATA Motors. He studied at Cornell and Harvard and started his career shoveling lime stone in the family business on the shop floor of TATA Steel. He soon went up the ladder to become the Chairman of TATA Group and in his 21 year, tenure the revenue grew 40 times and profit grew over 50 times. TATA's business is spread over in 100 countries. They employee 650,000 people and TATA group spends 66% of their profit on charity. 

A part of TATA Group is TATA motors and this is the story of Ratan Tata and TATA motors. TATA motors or then known as Telco started in 1945. They built heavy Trucks in collaboration with Daimler Benz. This collaboration ended in 1969. Tata motors decided to expand and make small trucks like 4x4s from the existing technology they had from Daimler Benz. In 1998 they launched a small hatchback car named “Indica’. They had invested a lot of blood sweat and tears in building this car which was Ratan Tata's dream project. But true to their blood line and technology in hand the little family hatch back drove like a truck. The clutch & the steering wheel felt like a truck and it wasn’t very reliable and neither did it have any safety features. It was made out of thick sheet metal used for trucks which made the car very heavy as well.  This dream failed to appeal to its consumers. The response was cold and the market never warmed up to Tata's Indica.

 

TATA's Board of Directors recommended to cut their loses and suggested selling TATA motors.

 

Meanwhile Ford had partnered up with Mahindra, another Local Indian car maker, in 1995 but by 1998 it was ready to enter Indian Market independently. This was the time where economy of eastern countries was booming. Growth in the western part of the world was saturated and there was a lot of room for growth in the east.

 

Ratan Tata arranged a meeting with Bill Ford and his board at Ford in Detroit. Tata was offering to sell TATA Motors to Ford. Ford probably would have been able to use their infrastructure to start producing their own cars, for the eastern countries. This would have reduced Fords expenses and headaches in getting established in the eastern Market. It was a win win for both the companies. But in the three hour long meeting Bill ford and the Ford's board only managed to insult and humiliate Ratan Tata. They asked him why did he invest so much money in developing Indica, when he didn’t know the first thing about the automotive industry. Moreover they added that buying TATA Motors was a favor Ford was doing, implying that Ford doesn't need TATA or Ford isn't really going to benefit from TATA much.

 

Ratan Tata got on an airplane after the meeting and decided to return to India. But as its said, ‘good insults are the hard to forget’. He took this insult as a motivation and decided not to sell TATA Motors and got back to work. He turned the company around in the next 5 years. TATA Motors started making profits. He expanded the business in several countries and Bought the car company Daewoo Commercial Vehicles and Marcopolo Bus Co.

 

Now TATA was at its strongest but at the same time 2007-2008, Ford was suffering. And the 2008 recession was like the last nail in the coffin. Ford needed rescuing but their losses and debts were too big for them to even ask the American Government to Bail them out. They needed to down size and sell off bits to reduce the bail out amount.

 

Ford's biggest loss making companies were Jaguar and Land Rover. Both of these British companies were bought over by ford but ford had tried to run them in a very American commercial way which lead them to incur huge losses.

 

No one during this down turn, in 2008 was ready to buy, the biggest lost making auto brands that were Jaguar and Land Rover. Bill Ford this time along with his team of board members and lawyers, flies to Bombay House, India to meet Ratan Tata where Ratan Tata offers to buy Jaguar and Land Rover for 2.3 billion U.S. Dollars. In the meeting Bill Ford told Ratan Tata that TATA was doing Ford a huge favor by buying those two companies off of them.

Ford still thought Tata was being stupid, to have bought two ships sunk so deep into the ocean that they cannot resurface, ever. Not only did Tata pull Jaguar and Land Rover out of the losses but both the companies started making profits and got back to the fame they deserved. It was not very hard for Ratan Tata to do this because, all he did was let Jaguar and Land rover go back to their roots and build the cars they were known to build, which Ford didn’t let them do. 

No where did Ratan Tata lose his calm or verbally insult or get angry during the meeting. 

 

Ratan Tata said if people throw stones at you, keep all those stones and build a path way to success from them. He could have easily been equally insulting towards Bill Ford in the meeting in Bombay House but he let actions speak louder than words.

 

 

If you would like to know more about how TATA changed Jaguar and Land Rover around check out this book, its called 

'JEWELS IN THE CROWN: HOW TATA OF INDIA TRANSFORMED BRITAIN'S JAGUAR AND LAND ROVER

Well this was the Story of Tata and Ford. Hope you Enjoyed this Story. Please press the like button. Also you can subscribe to my youtube channel - 'Jimboyrulez' for similar content. If you find any inaccurate facts please point it out to me and if you have any suggestions of what I should do articles or videos about, or how I can improve my videos, please let me know in the comments below.

Thank you. See you next Sunday.