Thursday, August 20, 2009

Can this man rescue JLR?

Profile of RAVI KANT, vice chairman, Tata Motors//Chairman Jaguar Land Rover

S Kalyana Ramanathan / August 17, 2009, 0:52 IST

It is a fad amongst successful executives to plan an early retirement so that they can go angling or write a book. Ravi Kant’s case is slightly different. He turned 65 a couple of months ago and stepped down from the post of managing director of Tata Motors — India’s largest automobile company — to become its non-executive vice-chairman. Still, he is unlikely to get the time to fish for trout in mountain streams or pen his memoirs. Kant has taken on what could possibly be the biggest challenge of his illustrious career — turning around Jaguar Land Rover. He has promised to turn around Tata Motors’ most-debated acquisition in about two years from now.

Given that JLR was profitable until the first half of 2008, it might seem a bit of a stretch to call its turnaround a daunting challenge. But then the time frame Kant has promised surely makes it harder than what it seems. JLR CEO David Smith, in a recent interview to

Business Standard, did not share Kant’s optimism. Smith’s doubts are not about JLR’s capabilities but have more to do with the state of the global economy. For the first time, after fifteen long months, the car industry in the United Kingdom posted growth in retail sales last month. But during this period, JLR sales continued to slip. One cannot look for a clearer sign that consumers are still not ready to splurge on luxury and premium cars.

JLR was not served to Tata Motors on a silver platter. The acquisition was sealed after nearly ten months of negotiation with Ford Motor Company. The price at $2.3 billion (Rs 11,000 crore in today’s value) was not cheap either. JLR insiders now tell that even though it was Tata Motors’ Chairman Ratan Tata’s vision to buy JLR, it was Kant who, from an executive standpoint (as the company’s managing director), chased it to the finishing line and brought home two of the world’s most luxurious automobile brands.

Kant had done similar work before. He played a key role in expanding Tata Motors’ global footprint — the acquisition of Daewoo Commercial Vehicles in South Korea and Spanish bus and coach body manufacturer Hispano Carrocera. Tata Motors executives say that Kant has his turnaround strategy ready which will begin to unfold in the next few months. Of course, they are unwilling to share details.

He has already made the right moves, though. In 2008, as Tata Motors moved closer to bagging JLR, one the earliest milestones the team from India achieved was to convince the unions in the UK that they meant business. Union leaders play a proactive and constructive role in the UK and, therefore, management takes them very seriously. Tata Motors used this to its advantage. Even before Ford’s board could decide to sell JLR to Tata, the unions backed the Indian group. Kant met with workers at all the four locations of JLR in the UK. He went one step further. A team of union leaders from the UK visited India and met with their counterparts in Tata Motors. Des Quinn, the lead negotiator for the unions, now recollects how the unions from the beginning were convinced JLR would be safe in Tata’s hands, something he couldn’t say about other suitors for JLR.

Kant’s rise in the Tata Group was swift. He came to Tata Motors in 2000 when he was 57. Starting as the head of commercial vehicles division of Tata Motors, he became the managing director in 2005 — around the same time that the Tata Nano had begun to take shape. Prior to this, his stint in the group was with Titan Industries. Apart from this, a good part of his career was spent with LML, Philips, Hawkins Cookers and Kinetic Engineering. Kant hit the limelight when he made LML a force in the scooter market which had for long been the monopoly of Bajaj Auto. He brought a new product line, spruced up the dealerships and revved up the advertising. Now, of course, the company has gone into oblivion.

History tells us that car makers around the world have had to toil for decades to put their luxury brands on the world map. Toyota’s Lexus, BMW and Daimler’s Mercedes have invested obscene amounts of money building quality, reliability and brand value. Tata Motors, which is one of the youngest car markers in the world today, took a short cut to this elite world of luxury cars. Now it is time to see if Kant can help it hold on to the marquee brands. Even a seasoned car maker like Ford could not hold on to these two mega-brands for long — it had bought Jaguar in 1989 and Land Rover in 2000. Kant has his task cut out.

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