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Old 27th October 2016, 11:57   #91
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

This affair should have been handled in a better way. It is a sad day for the enterprise called Tata that their differences are being reported in newspapers.

For investors, this particular incident has far reaching consequences.

- Are the Tatas afraid of embracing professional management to turnaround the group?
- Are they happy running the businesses like they have in the past 100 years?
- Won't they accept change as a part of evolution of the enterprise? What worked in 1925 may not work in 2016 and what works in 2016 may not work in 2100.
- What is the guarantee that the new Chairman won't be subjected to the same treatment, given the fact that Cyrus and Shapor Pallonji group controls 18.5% of the company stake?

Ratan Tata should have handled this better, and I refuse to believe that there were no better options available to get this sorted.
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Old 27th October 2016, 12:28   #92
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

From Mistry's letter -

"Another challenge in shutting down Nano is that it would stop the supply of the Nano gliders to an entity that makes electric cars and in which Mr. Tata has a stake."

Any idea on which entity is being referred to here? And what is this "Nano gliders"?
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Old 27th October 2016, 12:28   #93
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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 rdhawan15 View Post
Ratan Tata should have handled this better, and I refuse to believe that there were no better options available to get this sorted.
Absolutely. Should Mistry on the other hand have refrained from sending the letter he did? The answer to that question is closely tied to the other question - Should he have been sacked the way he was? Because not even his strongest supporters are claiming that he is a saint, that can take such things in their stride.

There is now strong criticism now being expressed of how Tata Sons can dictate things the way it does, at public companies like Tata Motors or Tata Steel, where the public, including financial institutions, have a large stake, with no external oversight, because Tata Sons is in effect a private company. How come this is realised only today, is of course the larger question.

And about independent directors being no more than postmen - this is everywhere, not just in Tata.

Interesting times. First BCCI, then UP and now Tatas.

Incredible India - for all the wrong reasons.
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Old 27th October 2016, 12:58   #94
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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 coldice4u View Post
I for one believe that business cant always be about balance sheets. I think Mr Mistry was too focussed on balance sheets which I think is not the way the TATA group goes about doing things.
Purely my opinion !
Tata group companies have good management teams, leaving the group chairman for other bigger duties. I feel the biggest responsibility of the chairman of Tata group would be regarding capital allocation decisions of group companies. It is here that one feels decisions were often based on emotions or egos, and which was perhaps being undone in the last few years.
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Old 27th October 2016, 13:04   #95
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

Quote:
Originally Posted by nishsingh View Post
From Mistry's letter -

"Another challenge in shutting down Nano is that it would stop the supply of the Nano gliders to an entity that makes electric cars and in which Mr. Tata has a stake."

Any idea on which entity is being referred to here? And what is this "Nano gliders"?
It seems Ratan Tata owns a 60% plus stake in an Electric Vehicle battery manufacturing unit from Norway and there may be an agreement to supply Nano Body Shell alone (without engine) for testing of the batteries or possible development of an Electric Vehicle.

Body Shell without engine is maybe being referenced as a glider possibly in the way it moves across the shop floor during assembly or as a plane without an engine.
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Old 27th October 2016, 13:20   #96
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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 nishsingh View Post
And what is this "Nano gliders"?
Bodies without engines.
See: https://officechai.com/news/cyrus-mi...-ratan-tata-2/
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Old 27th October 2016, 14:41   #97
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

Having read a copy of the mail that was apparently sent by Cyrus Mistry to the board members, I can't help but feel he has been at the receiving end of this ordeal.

The main reason behind it being the way the two personalities (RT & CM) operate to achieve the same longer term objective (sustainability and growth of the Tata Group of Cos.)
While Ratan Tata has always taken decisions that have been guided by emotions more than facts (JLR, Corus, Aviation, etc.), Cyrus uses a more logic based approach to decision making. The same emotional approach has helped Tata turn around JLR, while the logic based approach has helped Tata Motors improve their offerings.
Ideally it would have been great if there was a decision making framework in place that balanced the two leaders and their aspirations - but instead, it became more of a power play. This was compounded by the global economic and political issues that have taken centre stage the past couple of years, and could lead to a disastrous situation going ahead.

Take Brexit for example - we have Tata who is one of the largest employers in the UK, a country that is becoming increasingly hostile towards outsiders (including Indians). Given the high debt levels, it does make sense to exit according to Cyrus Mistry, but the emotional discord that would happen when Tata exits - may be something that Ratan Tata may be against.

At the end of the day - as more details unfold, the biggest loser here is Tata Group. Not only in the eyes of shareholders / stakeholders, but also in the eyes of the general public.

Note: the above is just my take on the matters. I'm sure insiders would know best.
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Old 27th October 2016, 15:19   #98
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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 lamborghini View Post
At the end of the day - as more details unfold, the biggest loser here is Tata Group. Not only in the eyes of shareholders / stakeholders, but also in the eyes of the general public.
Corporate India is the biggest loser. The thought arises - if the kind of issues surfaced in the mail can happen in Tatas, God only knows what is happening in other companies that aren't famous for integrity. Although that has already been brought to light with the extent to which banks are having to write off loans, a scandal that no one is talking about.
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Old 27th October 2016, 15:50   #99
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

Quote:
Originally Posted by Dennis View Post
It seems Ratan Tata owns a 60% plus stake in an Electric Vehicle battery manufacturing unit from Norway and there may be an agreement to supply Nano Body Shell alone (without engine) for testing of the batteries or possible development of an Electric Vehicle.

Body Shell without engine is maybe being referenced as a glider possibly in the way it moves across the shop floor during assembly or as a plane without an engine.
http://in.reuters.com/article/tata-m...88C07520120913

Seems like the stake was held by Tata Motors and was sold too. Not sure if the agreement to sell gliders is still intact. These are required only for testing the batteries themselves and numbers could be very few.
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Old 27th October 2016, 15:52   #100
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

Quote:
Originally Posted by Dennis View Post
It seems Ratan Tata owns a 60% plus stake in an Electric Vehicle battery manufacturing unit from Norway and there may be an agreement to supply Nano Body Shell alone (without engine) for testing of the batteries or possible development of an Electric Vehicle.

Body Shell without engine is maybe being referenced as a glider possibly in the way it moves across the shop floor during assembly or as a plane without an engine.
It is a statement made by Mr, Mistry as one of the reasons for keeping the Nano project alive. But whats the cost of a body shell if TM were not to supply these? Hardly anything. Not a valid point, and is immaterial.
Emotional values is the only reason Nano is still manufactured.
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Old 27th October 2016, 16:26   #101
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Post Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

Quote:
Originally Posted by shortbread View Post
...
What Ratan Tata always showed was initiative...
I cannot claim to know what Cyrus Mistry has been planning for 4 years...
Quote:
Originally Posted by ashis89 View Post
Tatas have always tried to give back to the society in some way or the other...
For Tatas, they have always done business while taking care of all the stakeholders (not only shareholders)
Quote:
Originally Posted by catchjyoti View Post
The explosive letter from Mistry to Tata Sons board in full.

source: http://www.telegraphindia.com/116102...ory_115900.jsp
As echoed by fellow team-bhpians above,
  • Tata's businesses have usually considered multiple aspects of brand, shareholders, sentiments and long-term intent among others.
  • When they transitioned from Ratan Tata to Cyrus Mistry, looks like these aspects either weren't highlighted duly OR weren't carried forward in the 4+ year tenure of Cyrus Mistry.
Elephants ignored become mammoths:
  • Based on the media updates and the mail from Cyrus Mistry to the Board, there appears to be a lot of serious gap in most parties involved.
  • Could Cyrus have had written a similar mail disclosing what he did now? That would have possibly made it much easier?
  • Too many elephants in the room, all getting ignored for 4 years???
The jigsaw:
  • As per media reports, Cyrus Mistry seems to have mentioned that he wasn't very keen to lead the group when offered but agreed later. So it shouldn't have been entirely impossible for him to take a call 2-3 years into his tenure, that it wasn't working out!
  • Ratan Tata himself, if he didn't hold Cyrus Mistry in his good books OR if the equation was getting stale over the period, could he have found a way out than to witness what happened now?
  • Lean Approach: Based on how it has been painted, Cyrus Mistry put his focus on profitability, and trying to make the organization leaner and fitter!
  • Portfolio Approach: Ratan Tata and the Tata group have always put their best bet on diversification, brand building, nurturing businesses and trying to turn them around and to maintain their portfolio!

The Picture:
  • The 2 approaches (mentioned above) by themselves do not get categorized as good or bad... people within one big group did not pick 1 of those as "the approach", that to me is fundamentally wrong!
  • As for Cyrus Mistry, if he hadn't made it clear that he would go tangential, then there is very little left to imagination!
  • Quite easy for me sit here and comment, but then I ask myself, if I can sit here and comment, why the Tatas and Mistrys who were in the middle, didn't see it coming!
Note: Ratan Tata, I hold him in high regard, as a gentleman, as "the businessman" and I am told he is good as a person too. Our individual feelings wouldn't matter much, but I feel sorry for him, just one of those cases where his business intellect didn't bear fruits, I presume!

Thanks,
C_
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Old 27th October 2016, 16:51   #102
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

What I fail to understand is both Cyrus and Ratan Tata knew each others working style as Cyrus was deputy chairman. So how is it that now both sides are claiming others working style is to blame.

As for other point about Tata group inherited by Cyrus had lot of debt, which company is debt free. Look at AT&T, Verizon, Reliance industries, Essar group etc. In business and in life some decisions pan out and some don't. So to say Ratan Tata made a mistake with Corus, Nano etc. is wrong as we all know hindsight is 20-20.

I think its a very simple matter of ego, Cyrus wanted same respect from everyone as Ratan Tata commanded but that did not happen, hence he possibly acted in certain unknown manner. On the other hand every senior member used to accept everything RT said as gospel truth but when confronted with non Tata as chairman and that too in early 40's resentment occurred.

Business is run by human beings and the way things are unfolding, to say because off pure P&L reasons this happened would be wrong. Instead in my view more intricate emotions are at play.
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Old 27th October 2016, 16:54   #103
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

http://economictimes.indiatimes.com/...w/55093500.cms

Now that both sides have had a go at each other on public forums, it is time for both parties to head back to the Board Room and sort out this mess to mutual satisfaction.

Cyrus and Ratan Tata need to demonstrate some maturity and professional acumen in setting aside their egos for the overall good of the Tata Group and its reputation.
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Old 27th October 2016, 16:58   #104
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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 heydj View Post
As for other point about Tata group inherited by Cyrus had lot of debt, which company is debt free. Look at AT&T, Verizon, Reliance industries, Essar group etc. In business and in life some decisions pan out and some don't. So to say Ratan Tata made a mistake with Corus, Nano etc. is wrong as we all know hindsight is 20-20.
It's not about being debt free, but more a question of being able to service the debt. If they are not able to, it will become a big issue - and businesses will be forced to restructure / close down at the added cost of poor publicity.
Look at Kingfisher, and just multiply the amount and impact that many fold.

Many have taken Ratan Tata's side, but if the letter from Cyrus Mistry is to be believed - the action was not expected, not just, and not fair to him.
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Old 27th October 2016, 17:07   #105
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

Here's Tata Sons responding to Mr. Mistry's letter to the board.
http://economictimes.indiatimes.com/...w/55093500.cms

The last statement is kind of funny:

The Tata way is to not run away from problems, or constantly complain about them, but firmly deal with them and build a better tomorrow.

What they mean to say exactly? That Cyrus was complaining constantly?! What a mess this is turning out to be.
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