TATA group, currently headed by Ratan Tata, is a prominent business house of India that is known for its ethics and values, apart from the scale and diversity of its business operations. In March 2008, Tata Motors acquired the Jaguar Land Rover division from the American Multinational automaker, Ford Motor Company for USD 2.3 billion. But this takeover was more than just a business deal. It was in fact a revenge on Ford for the insult and humiliation meted out to Tata. Here’s the whole story:
Tata Motors had launched its first indigenously developed hatchback car Indica in 1998 but the market response was not that good. Company chairman Ratan Tata was advised by his team to sell off the car division. Ford officials showed interest in taking over the car business from Tata.
In 1999, Ratan Tata and his team traveled to Detroit to dispose of their car division to Ford Motor Company. However, the 3 hour long meeting with Ford executives didn’t go well. Mr. Tata and his team had to face a lot of humiliation. The Ford officials even went to the extent of saying that they would be doing Tata Motors a favor by buying off their passenger car business.
Ratan Tata, visibly upset, left the discussion without finalizing the deal. He flew back to New York the very evening, before coming back to India. He looked disturbed throughout the 90 minute flight to NY.
Fast forward to 2008, nine years after the incident, tables were turned on Ford. The Motor Company was on the verge of bankruptcy due to global meltdown. Their much cherished Jaguar Land Rover brand had now become a liability due to heavy losses it was incurring.
Tata Group offered Ford to buy their ailing business of Jaguar-Land Rover. Ford chairman, Bill Ford, came down to Bombay House, the Tata Group Headquarters, along with his team to negotiate a deal. The Jaguar takeover was finalized at 2.3 billion US Dollars.
And it was a sweet and sober revenge taken in its own unique way when Bill Ford himself thanked Mr. Tata for doing him a big favor by buying JLR.
Within few years of the buyout, Jaguar brand made a dramatic turnaround under the Tata Group. It’s in fact the mainstay of Tata Motors’ now. And this clearly showed Ford who’s the real boss!