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Old 25th October 2016, 14:54   #46
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

I really think this has nothing to do with Tata Motors, it is about the other businesses and perhaps about some unsavoury stuff we are not aware of yet. And regarding this
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Originally Posted by Swapnil4585 View Post
I think that selling of loss making business is against the Tata philosophy and hence Mr Mistry stands removed.
Ratan Tata himself oversaw the selling off of many Tata businesses, such as TOMCO, Lakme, Merind, Nerolac etc. A Business Standard article assessing Ratan Tata's first decade, reprinted on Tata's own website, emphasizes this.
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Old 25th October 2016, 15:04   #47
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

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Unnecessary buying Jaguar instead of investing same in R&D in Tata motors. Building a company requires investments in your company not buying assets in the name of making company strong.

Have you ever seen Japanese auto companies buying belly up foreign companies like Jaguar? The answer is no. Because investing the same money in your company will profit you more than buying these so called premium brands.

Even after so many years what has Jaguar given Tata in terms of R&D one has to inspect minutely. Had Tata invested same money and resources in Tata motors car division, we wouldn't have seen such a sorry state.
Also what is an ex IFS officer doing in selection of new chairman. What experience does he have if I put rather bluntly?
I hope you're being sarcastic while saying that JLR was a bad step. That belly up company is profitable today and R&D efforts can be ( and probably are being) shared. If you think that cars like the Tiago and Hexa are possible without deep R&D for years, I guess you're mistaken. A car takes a decade to develop. And Tata motors was recently recognized to be one of the top R&D spenders globally.
About the IFS officer: I guess he can manage relationships. He is used to dealing with people at the highest levels of power internationally. He doesn't need to know a lot about making steel. He can have senior analysts for that.
I don't know why Tata did what it did. But it must have been something exceptionally strange. They don't behave so abruptly ever. And for people who think whipping an elephant can make it a horse, it can't. Big companies move slowly. Look at Ford or GM or Mahindra, for that matter. Things change gradually. If you try to penetrate change too deep into the culture too fast, things can get messy.
About Mr. Ratan Tata being too old: he has overseen the group's transformation in every business. Experience does not get old. The nano was not a failure of his vision. It was the result of poor execution.
Let's not judge characters of leaders who inspire so quickly.

Last edited by Nissan1180 : 25th October 2016 at 15:05.
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Old 25th October 2016, 15:37   #48
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

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Originally Posted by Nissan1180 View Post
About Mr. Ratan Tata being too old: he has overseen the group's transformation in every business. Experience does not get old.
While Mr. Ratan Tata certainly has wealth of experience and commands utmost respect globally, group companies like Tata Motors need dynamism at execution level. Sadly, reverse happened where Chairman was dynamic while those heading the companies still followed the archaic approach.

An ideal scenario would have been Cyrus Mistry heading a Group company and proving his mettle through turnaround and earning acceptance for his approach to eventually move to the top. But then, hindsight is always 20/20.
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Old 25th October 2016, 16:02   #49
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

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Originally Posted by GTO View Post
Sure is a lot of bad blood. Tata's statement doesn't even thank Cyrus for his contributions or wish him well. Very un-Tata I must say.
There sure is a lot of bad blood and things are likely to get murkier.
ET has just reported " Boardroom Battle goes to courtroom. Cyrus Mistry may challenge his sacking in court at 4.30 PM today".
He has roped in two senior lawyers Shuva Mandal and Ameya Gokhale from Shardul Amarchand Mangaldas.
Now Tatas have already filed a caveat in all courts to be heard before taking any decision, so we are in for some tough times for the group.
Sad.

Last edited by nkghai : 25th October 2016 at 16:07. Reason: adding lawyers
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Old 25th October 2016, 16:07   #50
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

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Originally Posted by ksameer1234 View Post
It is quite true that Tata does business in a more philosophical way than being driven by profits.
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Originally Posted by Zappo View Post
If the Tatas have taken such a tough and quick decision (remember, they are known to be otherwise quite slow when it comes to taking swift, disruptive decisions) then there has to be some very serious reasons which I or you may or may not agree with but which the group believes is not acceptable from the man who is their face to the world. They will not talk of these things openly, knowing how they operate. Washing dirty linen in public is not their style IMHO.

Let's watch how this one unfolds.
I completely agree with the two of you. From reading on what's being said and trying to listen to what is not being said, I get a inkling that this has got less to do with performance issues. The ideological differences are what were pulling the Chairman and the board apart. This is just an outsiders reading of the situation. Will we know for sure what went wrong remains to be seen.

The appointment of Ratan Tata is purely for the sake of optics. He is one personality that many recognise instantly and his appointment will project a picture of business as usual for the day to day operations. A very smart move indeed. If he had not been brought in then the post of Chairman would have be left vacant till the time a replacement is found and that would have been even more damaging.

All that we can do now is wait and watch. That being said, it will now be even more difficult for the replacement to get a hold of the group.

Once bitten, twice shy. Will be applicable for both the board and the replacement Chairman, unless he/she comes from within the TATA group and understands how they function.
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Old 25th October 2016, 16:08   #51
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

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Originally Posted by Nissan1180 View Post
I hope you're being sarcastic.......
About Mr. Ratan Tata being too old: he has overseen the group's transformation in every business. Experience does not get old. The nano was not a failure of his vision. It was the result of poor execution.
Let's not judge characters of leaders who inspire so quickly.
Yes new products have been launched but just see the gestation due to misplaced priorities.

Regarding leadership and experience, even Infosys bought Narayan Murthy to improve performance but it took Sikka to bring some of the lost magic back. So it proves experience does gets old and one has to change oneself according to changing circumstances. Let us not become fanboy because these are profit making companies who have carefully crafted image of their CEO, chairman etc. What Tata risks is bad publicity which of late it is on rise. Such negative perception will affect company in long run.

Last edited by FrozeninTime : 25th October 2016 at 16:17.
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Old 25th October 2016, 16:18   #52
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

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Originally Posted by FrozeninTime View Post
Unnecessary buying Jaguar instead of investing same in R&D in Tata motors. Building a company requires investments in your company not buying assets in the name of making company strong.

Have you ever seen Japanese auto companies buying belly up foreign companies like Jaguar? The answer is no. Because investing the same money in your company will profit you more than buying these so called premium brands.
I have two word for you: Lateral Growth. Google it and you will know why it was not an "unnecessary" move.

Also, you would be surprised to know that Jaguar's profitability (EBIT in percentage) is more than Toyota or any other Japanese car maker.

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Originally Posted by FrozeninTime View Post
Even after so many years what has Jaguar given Tata in terms of R&D one has to inspect minutely.
Come on, let's be honest here. Lot of stuff you see in new models of Tatas like, Tiago, Zest, Hexa, etc are influenced by JLR's design philosophy. This wouldn't have been possible without JLR's acquisition.

Quote:
Had Tata invested same money and resources in Tata motors car division, we wouldn't have seen such a sorry state.
That's what Tata was doing prior to moving on to the strategy of acquisition. All great companies today improve their products by acquiring other companies who are good at it already. Apple, Google, Intel - all do it.

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Cyrus has consolidated the company and tried to remove old guard which I feel has ruffled feathers of Tata sons trustees
I agree with this.

Quote:
Sorry to say Ratan Tata's time is up. He may be greatest businessman and Angel to so called start ups but he should have set an example by retiring gracefully and not meddling in politics and company affairs.
Totally agree with this. However, technically he is still the owner so he can hire/fire chairman/CEO based on his judgement.

Quote:
Also what is an ex IFS officer doing in selection of new chairman. What experience does he have if I put rather bluntly?
Seriously? There could have been doctors on that board and it would be perfectly fine. We are talking about Tata Sons not Tata motors. They make almost everything from salt to software - how one particular skill or lack of it, matters?

Quote:
Whole episode has been handled rather very poorly and clearly shows feudal structure of company rather than a professionally managed company. I only hope this internal battles for power struggle doesn't affect the future product decision in Tata Motors.
I am no fan of Ratan Tata or Cyrus either but these things end like this only.
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Old 25th October 2016, 16:31   #53
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

Found something regarding Tata motors here

Quote:
Its inability to grab market share — or even hold on to what it had — has made Tata Motors one of the worst performers within the Tata Group, under Cyrus Mistry.

Tata Motors’ poor performance was due to a mix of unfavourable market conditions and the company’s inability to cash in on the fastest growing segments.

After Mistry took over the Tata Group in 2012, the commercial automobile segment witnessed its biggest downturn, declining by over 25 per cent year-over-year from 2012 to 2014.

Nano disaster

With commercial vehicles being the cash cow for segment leader Tata Motors, the results weighed heavily on the company. “To add to the woes, the big bet that Ratan Tata had put on Nano had already sucked all the resources from the company, which, instead of focusing on multiple car segments seemed obsessed with the cheapest car in the country,” said an analyst at a Mumbai-based brokerage, who did not want to be quoted.

Nano sales turned into a disaster for Tata. While other auto companies launched 48 models in the personal vehicles segment from 2009 to 2014, Tata could not come up with even a single offering.

In 2014, Tata Motors finally came out with the Bolt hatchback and Zest mini-sedan, both of which failed to meet market expectations. Tata Motors also failed to focus on the most lucrative and fastest growing segment — the mini SUV segment.

Mini SUV Ford Ecosport changed the fortunes for Ford Motors in India, while the Renault Duster and Hyundai Creta also helped the two foreign carmakers rake in more than Tata’s entire personal vehicle portfolio.


JLR to the rescue


The saving grace for the company was its 2008 acquisition of Jaguar Land Rover. The group made JLR one of the biggest corporate turnaround stories globally.

Even today, JLR numbers have been helping Tata Motors stay afloat. But even there, the company is facing troubles in China.

The consolidated revenues for Tata Motors in 2011-12 were ₹165,654 crore, growing 35.6 per cent over last year. Today, the growth has slowed to 5 per cent, with revenue in 2015-16 at ₹2,75,561 crore.

What’s more important is the profitability. While Tata Motors has been able to maintain its EBITDA margins at over 14 per cent in the last four years, profit after tax has gone down to ₹11,024 crore in 2015-16 from ₹13,517 crore in 2011-12.

In the midst of all this, the company’s market share has declined to 13.1 per cent from 25.2 per cent in 2012.

On the brighter side, Tata Motors’ recently launched Tiago hatchback is now the biggest success for the company in many years.

Upcoming models such as the Hexa and Nexon SUVs should be able to help the company improve its offerings, and perhaps, regain some of the lost market share.
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Old 25th October 2016, 16:33   #54
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

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Originally Posted by ksameer1234 View Post

An ideal scenario would have been Cyrus Mistry heading a Group company and proving his mettle through turnaround and earning acceptance for his approach to eventually move to the top. But then, hindsight is always 20/20.
Exactly the same things were said about RNT in the early nineties because the only operational experience he had then was running NELCO and never being successful with getting it back to profitability. I think he also had a stint at Empress Mills, and less said about that, the better. In terms of qualifications, he was/is just an architect.

He was fortunate that when he started the big bold decisions, he did not have a back seat driver; JRD passed away very early in his tenure.

The group will now struggle to get a true leader because no one will be willing to come on board if RNT is going to be still in the car, in the rear seat.

This entire episode, including the very long time taken in the first place in selecting the RNT replacement some years ago, shows Tata in very poor light. And other than TCS that is riding a wave, and JLR that isn't truly Tata/India managed, all the other companies are delivering mediocre performance. Tough times ahead from the group; even if Cyrus was making wrong moves, business as usual isn't the answer any more.
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Old 25th October 2016, 16:56   #55
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

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The group will now struggle to get a true leader because no one will be willing to come on board if RNT is going to be still in the car, in the rear seat.
Very true. In fact, whoever is now appointed as Chairman will be as scared as an intern reporting to a Director, one who is constantly breathing fire. Whoever is the new Chairman will be more concerned of saving himself of mockery meted out to his predecessor than take bold decisions, which is indeed need of the hour.

Tough times ahead for the business and it would take a brave soul to take up this challenge.
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Old 25th October 2016, 16:57   #56
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

Wikipedia is updated

Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out-tata.jpg

Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out-tata1.jpg
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Old 25th October 2016, 16:59   #57
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

Further on the subject: I am not sure how Tata Motors is led today, in terms of one leader for all of it including JLR. If it isn't, it is because it is a very complex business, with unrelated pieces stitched together.

Now that is in spite of it all being in the automobile sector. Consider then the complexity demanded in having one leader for the entire group, responsible for the success of software at one end, and salt at the other, with all other things thrown in between the two. One reason why conglomerates aren't in vogue or successful globally is because it is close to impossible to find such a person.

Interesting times ahead for sure.
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Old 25th October 2016, 18:50   #58
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

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Originally Posted by Sawyer View Post
The group will now struggle to get a true leader because no one will be willing to come on board if RNT is going to be still in the car, in the rear seat.
I completely agree. Any potential candidate will be apprehensive because:

- Ratan Tata can fire you.

- You are filling the spot once occupied by a huge share-holder (i.e. Pallonji Group) who also happened to be fired.

- The way that Mistry was fired was damn tasteless. Big companies usually do it in a more respectful way, and give you the option to 'resign' yourself too.

- Tata is known to have trouble at the top. Just see how many bosses Tata Motors has had in the last decade. Remember how Carl-Peter Forster abruptly resigned & walked away?

How you treat your team is very important. People tend to forget that.
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Old 25th October 2016, 19:08   #59
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

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How you treat your team is very important.
Absolutely. Treat your people as you would like them to treat customers.
Tata claim to do this better than most. And, ironically, a quote from a Mistry talk, just a month ago:
""Compassion is the key word. If there is one thing that I have absolute clarity on it is that the course of action selected should not undermine the moral contract with our larger employee base."
This, on the layoffs that may come with right/downsizing.
The ONLY thing that justifies this kind of sacking is a serious integrity issue. Which does not seem to be the case.
My regard for the group in general was never high, but I had a lot of regard for RNT. Not any more.
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Old 25th October 2016, 21:17   #60
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

I think it is very naive for people to think that sitting on the top of 'any' corporate ladder does not have it's pitfalls! If anyone has read of RT's own struggles during his early days at Tata, reveals how challenging the role is.

No one is ever safe at the top, whether its VW, Korean chaebols, the hundreds of banking directors who became fall guys....the list is endless. The corporate world is a far dirtier game than than regional politics especially since it's played by much smarter people.

This is not the first time someone's been fired and will not be the last. The player will never be bigger than the game and Mr.Mistry is not bigger than Tata.

Firstly, for the past 4 years Tata has found itself in a stalemate when compared to the breakneck growth under RT. I understand the need to learn about the group, consolidation, long term plans but c'mon 4 years of running the firm and atleast one major decision to be really proud of. Being risk averse is not a bad thing but Cyrus Mistry was like watching Rahul Dravid bat on a bad day. He would be not out at the crease with very little to show for it.

Secondly, Mr.Mistry's answer to most issues was to sell if it was easy to do. If this was the strategy Tata used every time it faced a challenge the only firm under the umbrella right now would be TCS!

Thirdly, I am sure Mr.Mistry must have been given the option of gracefully stepping down before being fired. Perhaps pride and a pallonji backing meant he thought otherwise, but he could have saved face for both himself and the organisation much earlier.

Finally, there is no dearth of candidates who can replace Mistry. Let's be honest we're not talking about Tendulkar here, and even then it hasn't stopped India from winning.

Last edited by shortbread : 25th October 2016 at 21:36.
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