JCNA CLUB NEWS

Jaguar SaleBy Jim Morton On January 3 Ford announced that Indias Tata Motors Ltd was the top bidder for Jaguar and Land Rover, and that focused negotiations are underway; CEO Alan Mulally said January 8 that a deal to sell Jaguar and Land Rover to India's Tata Motors should be complete during the first quarter. Buying Jaguar and Land Rover, which date to Britain's colonial era, would give Tata a presence outside Asia and provide access to new technology. But there is much more to the story. First, who is Tata? Tata is BIG. Founded by Jamsetji Tata in 1868 as a trading company Tata now groups 98 companies into 7 business sectors. Annual revenue of $29 billion USD, assets of $25 billion, and stock market value of $78 billion (5% of and largest on Bombay Stock Exchange) account for 3.2% of Indias GDP. Profits after tax (30% tax) of $2.8 billion were 10% of sales and grew 33% in the past year. Tata operates in 85 countries across 6 continents, and exports to 80 countries from headquarters in Mumbai (Bombay). Tata appears to have been extremely aggressive and clever at creating joint ventures (JV) with other companies, many of them American, to gain access to technology which they combine with their low wages and rapidly growing market. Tata Sons holds the bulk of shares in the Tata Group companies, and owns the Tata name and trademark. About two-thirds of the equity capital of Tata Sons is held by philanthropic trusts endowed by members of the Tata family. Tatas story is comprehensively documented at www.tata.com, but here are a few tidbits. In the US you know Tata as Tetley Tea, Fifth Avenues Pierre Hotel in NYC, and new owners of Tycos Global Network, 36,000 miles of undersea cable connecting America with Europe. Consumer products include Tetley tea, Tata coffee and tea, Tata McGraw Hill Publishing which reprints American books, bone china from Tata Ceramics, and Titan jewellery and watches, the worlds sixth largest watch manufacturer. Engineered products include dashboard clocks for European and American cars plus precision components for the avionics industry. Services include the 76 hotels of the Indian Hotel group (Taj Hotels Resorts and Palaces) on the Indian Ocean rim; low-cost Ginger Hotels developed by a business strategy professor of mine at U. of Michigan; financial, quality and strategic management consulting services; and commercial real estate development. The Chemicals group includes Rallis India pesticides, fertilizers and seeds; Tata Chemicals soda ash, cement, fertilizers, salt, and agri-services. Tata pigments, a subsidiary of Tata Steel makes red and yellow pigments from oxides of iron. Advinus Therapeutics develops drugs in cooperation with Merck. In energy Tata Power is Indias largest private sector power utility. And it designs and builds power plants in a number of other countries. Tata BP Solar provides solar electrical generation hardware, exporting 60% of it to Europe and America. Tata Steel, in the Materials Group, is Indias largest steel producer, owns its own mines, and recently completed a $2.3 billion modernization program to make it one of the lowest cost producers in the world. Steel has a 50:50 joint venture company with Americas Ryerson-Tull, a $3 billion steel distributor with warehouses in Greensboro, Charlotte and Goldsboro. Guess where our local steel comes from. Tata Advanced Materials makes composite bulletproofing materials, antenna reflectors and specialty buildings. CJC member Rolf Zenker worked with Tata Steel from 1974 to 1979, while living in Singapore. At that time he reports, Tata was a well-established power-house in India, honest, operating above board, very influential because of its integrity established in that part of the world. Information Systems and Communications are very important to Tata. Business software development, technology and design consulting, business services (call centers), and many other high-tech businesses. Tata employs more white than blue collar workers in total Finally, we get to the Automotive Group. Tata Autocomp Systems has division specializing in many components and collaborations with Johnson Controls, Owens Corning, Hendrickson truck suspensions (now Boler) and others in Japan and Europe. Tata Motors is now Indias largest automotive company, largest truck producer with 130 models and 70% market share, and second largest car producer. It is the worlds fifth largest medium-heavy truck manufacturer, not surprising since it was founded in 1945 and made trucks in collaboration with Germanys Daimler-Benz. In 2004 it acquired Koreas Daewoo Commercial Vehicle Co., and in 2005 purchased a 21% share of a Spanish bus and coach manufacturer. Tata Cummins manufactures big diesel engines under a JV with Cummins USA. Tata Construction Equipment makes earth moving equipment under a JV with Japans Hitachi. Concorde Motors retails Tatas range of passenger vehicles, but that is a story for next month along with what Jaguar-LR might mean to Tata.